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Eighteen years ago, I wrote that the CRTC became “one of the world’s first regulators to clearly enunciate a “hands off” policy toward the Internet.”

At that time, the Commission issued a Public Notice enumerated by codes under each of its Broadcast and Telecom sides: Broadcasting Public Notice CRTC 1999-84 and Telecom Public Notice CRTC 99-14, with a simple title: “New Media“. The decision makes for interesting reading.

It was a different time for internet content, 5 years before Facebook, 6 years before YouTube: “The Commission considers that the majority of services now available on the Internet consist predominantly of alphanumeric text, and, therefore, do not fall within the scope of the Broadcasting Act and are thus outside the Commission’s jurisdiction.”

At the time, the CRTC was confident about Canadian content development:

In the Commission’s view, there is no apparent shortage of Canadian content on the Internet today. Rather, market forces are providing a Canadian Internet presence that is also supported by a strong demand for Canadian product.

The Commission notes that a number of initiatives and funds have been developed in both the public and private sectors to help finance and support Canadian new media product.

For these reasons, the Commission concurs with the majority of participants that there is no reason for it to impose regulatory measures to stimulate the production and development of Canadian new media content.

As far as regulation of illegal and offensive content, at the time the CRTC wrote:

The Commission notes that Internet Service Providers (ISPs) and their industry associations, in conjunction with government agencies and other organizations, have made efforts to develop codes of conduct to help combat the distribution of offensive material. It considers that more could be done for example, by establishing complaint lines and industry ombudsmen and developing international cooperation with law enforcement agencies. The Commission also notes that effective content filtering computer software is being developed. Such software will assist those who wish to control access to material that they feel is inappropriate.

And the Commission was as concerned about competitive ISPs having wholesale access to high speed facilities from the phone companies and cable companies:

The Commission considers that access by competitive providers of Internet services to the facilities they require to offer services is an important concern. In a 1998 decision (Telecom Decision CRTC 98-9), the Commission decided it would approve the rates and terms under which incumbent cable and telephone companies provide higher speed access to their telecommunications facilities to ISPs. The Commission will set out its general regulatory approach to rates and terms for such cable carrier higher speed access services in the near future.

The past 5 years have seen Canada apply an increasingly heavy regulatory hand. A search for “Regulating internet” on my blog turns up a number of posts expressing concern about government intervention.

Three years ago, already faced withe a list of areas in which the CRTC had intervened, I wrote: “Are we restricting the evolution of creative business models and innovation through regulation?”

Earlier this year, I asked “Will Canadians see greener Internet pastures in the USA?”, observing Orwellian euphemisms of “openness” and “choice” to characterize greater government control. Canada’s current approach to internet regulation contrasts diametrically with our neighbours to the south. As FCC Chair Ajit Pai told The 2017 Canadian Telecom Summit:

In short, America’s approach to broadband policy will be practical, not ideological. We’ll embrace what works, and dispense with what doesn’t. That means removing barriers to innovation and investment, instead of creating new ones. That means taking targeted action to address real problems in the marketplace, instead of imposing broad preemptive regulations. And that means respecting principles of economics, physics and law, and acting with humility as we regulate one of the most dynamic marketplaces history has ever known. This vision will unleash the massive investments that the digital world demands.

Eighteen years ago, Canada was among the first regulators to set out a light-touch approach to internet regulation. What happened?

Which path will the new Commission leadership follow?

A recent news item appears to contradict testimony given during the CRTC’s recent #TalkBroadband hearing that stated, “all Europeans will have basic access by 2013. That’s been accomplished.”

According to the BBC, “The government will not automatically roll out broadband to those areas of the UK that don’t yet have services, it has been confirmed.”

The article quotes a spokesperson from the UK Department for Culture, Media and Sport stating “Our current plans will reach at least 95% of the UK, but we want everyone to have fast broadband so we are introducing a Universal Service Obligation to help make sure no-one is left behind.” The article says the government hopes to have its Universal Service Obligation in place by 2020.

I checked the text of the actual presentation [pdf] to ensure there wasn’t an error in the transcripts. The original CRTC hearing speaking notes stated:

Second, the Digital Agenda’s central aims are much more ambitious than those of the FCC or the CRTC:

1. all Europeans will have basic broadband by 2013;
2. all Europeans will have internet access above 30 Mbps by 2020;
3. at least half of European households will subscribe to internet connections above 100 Mbps by 2020.

How can all Europeans have basic broadband already if the UK government is saying that it could be 2020 before its universal service obligation can be fulfilled? Is the grass really so much greener elsewhere?

Despite what the CRTC was told, Canada’s broadband availability (99% – 96% at speeds of 5Mbps or higher) appears to be pretty good compared to the UK, despite the vastly different population densities and geographic challenges. Just last December, the UK government launched a satellite voucher program, to provide a higher speed option for up to 300,000 households that do not have access to internet speeds faster than 2 Mbps. Satellite is part of the solution even in the UK, a country that has almost double Canada’s population residing in a land mass less than 1/40 its size.

Policy making needs to be rooted in facts and it isn’t helpful to have incomplete evidence set before the Commission.

It is fair to say that all of us would like everyone to have access to broadband. But, there is a cost to deliver such services. The most important questions remain: how much of a subsidy is required, who should be eligible for that subsidy, and how do we pay for that subsidy.

Above all, as I have written many times before, affordable broadband isn’t just a rural issue.

My neighbour is putting in a pool. As I sit at my desk looking at the construction crew, I think back twenty-five years to a day that I went out for lunch with my office-mate from Bell Labs. We were envious of the road workers on the Garden State Parkway. They were outside on a beautiful spring day. At the end of a shift, construction workers get to see what they accomplished: a hole was dug; a half mile of road was paved; a pile of dirt got moved from one place to the next.

Compared to our office jobs, it looked kind of satisfying. We were planning network development – with features and capabilities that would need 5 years to implement. Some of the capabilities would never see the light of day. We wondered if we would ever get to celebrate the completion of our work. Still, we have objectives; we knew what we were trying to achieve.

The construction workers probably looked at Sam and I driving by, thinking that they envied our jobs: after all, we got to take off in our car for lunch; we had an air-conditioned office; we didn’t have to worry about rain interfering with our work schedule.

The grass is always greener?

Parliament has recessed and we are expecting another cabinet shuffle this summer, likely bringing another new face to head up Industry Canada. When Christian Paradis was appointed two years ago, we had been expecting the imminent release of a national digital strategy. That was understandably delayed until the new minister was able to get a grasp of the file. Two years later, Canada continues to drift aimlessly without any clarity on the objectives. As I wrote a few weeks ago, the absence of a clear strategy has led to us having inconsistent messages and somewhat predictable turmoil.

The objectives keep changing. If Canada had truly wanted a viable “fourth” player in wireless, then the AWS auction was structured in a way that worked against that objective. If a stong national new entrant was the objective, then the 40 MHz new entrant set aside should have been auctioned as a single tier one license. Foreign ownership should have been liberalized in advance. If the new entrant spectrum wasn’t supposed to fall into the hands of the incumbents, then the five year restriction should have been 10-years or longer. If the auction winners were supposed to forfeit their spectrum if they didn’t deploy, then this should have been a condition of license.

No clear strategy. No clear objectives. No scorecard for measuring progress.

The absence of a strategy isn’t just an issue for telecom services and the digital economy. Yesterday, in a new paper looking at “The Resurgence of Industrial Policy and What It Means for Canada“, the Institute for Research in Public Policy observed:

Like other countries, Canada is once again engaging actively and more openly in industrial policy. In fact, it has a profusion of industrial policies, what it lacks is a strategy.

What are we trying to accomplish? How do we measure success? As I said last week [here and here]:

Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.

The guys working in my neighbour’s yard know they are building a pool. They have an objective, with a timeline. The site supervisor can see how they are progressing toward their objective and make management decisions to keep the project on schedule.

How do we celebrate success in digital policy, if we aren’t clear about what we are trying to do?

Getting ready to fly back to Canada, I can reflect on some international communications experiences. I have been overseas for the past week visiting my daughter. It has been interesting to travel in a country that enjoys mobile penetration of more than 140%, despite prices that appear to be in the same order of magnitude as ours in Canada. My daughter’s voice and data plan is around $70 per month, which takes about 3 and a half hours to earn. Her plan includes 1 GB of data, with extra charges for more. She is shopping for a better plan, no different from her friends back in Toronto.

Mobile phones are everywhere and competition appears to be vibrant, with number portability and switching incentives. But using any measure of affordability, prices are much, much higher as a share of local wages. So, the local government is taking steps to add more competitors to the marketplace.

While most areas have solid connectivity, 3.5G is not prevalent and no one is talking about LTE.

I kept connected with a local SIM card, in part to avoid roaming charges, but mainly so that friends and family over here would have a local number that they would call. Generally, I have used WiFi to connect my Blackberry and PC, thanks to open coffee shop networks.

While the grass always seems greener elsewhere, it has been worthwhile looking beyond raw penetration numbers and arbitrary price baskets to see how people are using their means of communications.

From the “Grass is always greener” files.

The UK regulator, Ofcom, has released a report on consumer internet services. It turns out that the UK internet experience is not that different from what we see in Canada.

For example, according to the report,

UK consumers receive an average broadband speed of 3.6 megabits per second (Mbit/s), comprehensive new Ofcom research reveals today.

That’s less than the average maximum possible speed of 4.3 Mbit/s across the UK and significantly below advertised headline speeds.

Most consumers surveyed were reasonably happy with their broadband service, with only 9% expressing dissatisfaction overall. 93% of consumers were satisfied with their web browsing experience.

UK based Analysys Mason says that the Ofcom study shows that consumer demand for internet services is not far ahead of supply and people understand the limitations of what they are buying. According to their interpretation of the study, the customer satisfaction numbers indicate that consumers understand that speed is dependent on variables including how many people are online at any time.

There are of course ISPs that provide a materially better service than others, but the overall low level dissatisfaction would suggest that accusations of mis-selling have been somewhat over-hyped.

I especially enjoyed the closing paragraph of the Analysys Mason press release:

The telecoms industry is used to hearing tales of consumer dissatisfaction and of ‘pent-up’ demand for bandwidth – often from excitable bloggers, or from parties that have an obvious interest in promoting that view. Research often misinterprets long-term predictions of bandwidth usage as indicators of demand. What this survey shows above all else is that, so long as people are aware of what they are buying, supply to a large extent informs demand and that the two are in truth substantially aligned.

Good lessons for Canadians to keep in mind as we prepare to see the filings for the CRTC’s network management proceeding.

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