How will we know if we got it right?

I have been taking some time to write about last week’s CRTC decision creating a framework for evaluating ISP differential pricing practices.

I typically try to go beyond the simple reporting of what is in a decision, in order to help understand the background and interpret the strategic implications of the decision for industry stakeholders. Scott Prescott at Fasken Martineau produced a good summary of the decision itself.

The arbitrary nature of a number of aspects of the decision coupled with its failure to conform with the Policy Direction makes it difficult to apply my usual analysis. I disagree with the decision. As I told IT World Canada, “By removing choice, we’ve increased costs for consumers who decided to subscribe to [Vidéotron’s] service, while lowering costs for nobody. How is it anything but Orwellian to characterize that as ‘consumer-friendly’?” Would  the decision withstand an independent audit of compliance with the Policy Direction, notwithstanding the decision’s statement that it “(a) relies on market forces to the maximum extent feasible, (b) seeks to remove barriers to entry, (c) is a measure that is efficient and proportionate to its purpose.”

In any case, one might ask if there will be a way to evaluate the benefits of Canada’s differential pricing policy for internet service providers, given that the CRTC Chair said “A free and open Internet gives everyone a fair chance to innovate and for a vast array of content to be discovered by consumers.”

Heritage Minister Melanie Joly is trumpeting the decision as evidence of Canada’s support for net neutrality, providing “an advantage to Ottawa as it tries to encourage major digital media firms such as Netflix and Google to support and distribute more Canadian-made content.”

Is it an advantage for Canada to be enacting such a different framework for regulating the internet?

Among the first acts by FCC Chair Ajit Pai was to drop an investigation into differential pricing practices by US carriers. Earlier this week, a court struck down a prohibition on differential pricing issued by the Dutch Authority for Consumer and Market, since the practice is permitted by pan-European regulations.

So, as the FCC steers away from regulation of internet service providers and European courts re-affirm that regulators need to allow ISPs to differentiate their services, Canada becomes a testbed for what the CRTC has termed its overall “policy framework for net neutrality.”

As I have often asked, how will we measure success?

As one long-time observer of the Canadian regulatory scene was asking last week, should we expect capital to migrate to Canada because of our better rules? If we look at the rate of startups in Canada versus the rate in the US, should we expect that rate improve in Canada relative to US?

There will certainly be much discussion of Canada’s network neutrality framework at The 2017 Canadian Telecom Summit, taking place June 5-7 in Toronto. You can save $250 by registering before the end of April.