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Is re-imagined competition law the answer to concerns about Big Tech getting to be just too big?

That is the subject of an upcoming webinar hosted by the International Telecommunications Society (ITS). In a recent LinkedIn post, Stephen Schmidt, Vice-President Telecom Policy & Chief Regulatory Legal Counsel at TELUS, and Chair of ITS, writes:

Over the past decade, Amazon, Apple, Facebook, Google, and Microsoft have become the most valuable companies on the planet. These platforms have transformed our economic and social lives, enabling e-commerce, teleworking, video streaming, virtual healthcare, and more. Notwithstanding these benefits, this meteoric rise has raised concerns that Big Tech has become too big.

He asks if competition law, applied to Big Tech, might be a way to protect consumer privacy, enforce data protection, and ensure freedom of expression.

To that end, on September 15 now rescheduled to take place on October 20 at 10am (Eastern), ITS will host Big Digital Tech and the International Application of Competition Law. Registration is free.

Dr. Robert Picard, a senior fellow at the Reuters Institute for the Study of Journalism, University of Oxford, will consider the potential and trade-offs for applying competition law to control big tech. Professor Picard is considered to be a world-leading specialist on media economics and government media policies. Drawing on global experience and international variations in the application of competition law, the webinar will consider mechanisms for intervention, overlaps with other areas of regulations, and possible obstacles to a more ambitious use of competition law to promote and protect digital rights.

As I have highlighted before, I have taken advantage of continuing education opportunities from the International Telecommunications Society, and I have promoted many of these webinars on these pages. ITS serves as “a global platform for industry, policy makers and regulators to create a 360-degree view of an issue from the perspective of different regions and jurisdictions.”

I hope to see you at the September 15 session.

There was only one year that we held The Canadian Telecom Summit in a government owned facility.

Back in 2004, the event had grown big enough to warrant moving to one of Toronto’s larger exhibition facilities. The CEOs of Bell, Rogers, TELUS, Sprint Canada, and Allstream were all keynote speakers, as well as the CEOs and COOs from Cisco, Nortel, Ericsson, Siemens and Alcatel. Attendance was projected to be triple what it had been the previous year.

We booked the relatively new South Building of the Metro Toronto Convention Centre (MTCC), right downtown. The event was only held there once, and the reason we didn’t go back can be summarized by telling you a little story about the coffee.

A few weeks before the Summit was taking place, I attended another technology trade show at the same venue. I poured myself a cup of coffee from one of the big jugs and almost immediately spat it out, just like we have all seen in the cartoons. I called our conference producer and asked her to get the type of coffee changed.

She called me back a few minutes later with the response, “No”. Changing coffee suppliers? Unheard of.

We were told that was the coffee that gets served at MTCC. Period. After much discussion, we were able to negotiate buying our own ground coffee, providing it to the MTCC and they would still charge us the same $3 per cup to serve it, with the added proviso that we would agree to sign waivers for serving “outside” food and beverage. We were told how many pounds of coffee to provide for the 2 day event. As it turned out, buying bulk ground coffee isn’t that expensive – in those days, it was about $70 for a case with 20 one pound bags. A pound of coffee made 50 cups. So I bought nearly 50% more than what the venue recommended – just to make sure.

As it turned out, at the end of the first day, the maitre d’ informed me that he had never seen people drink so much coffee. He warned me that they were going to run out of coffee, and asked if we wanted to get more, or start serving their coffee. I had a taxi bring us another case of our roast.

After the event concluded, we met with the venue to discuss the ups and downs. We paid thousands of dollars for coffee for the nearly 600 people at the event. The MTCC salesperson echoed the Maitre D’s comments that our attendees drank more coffee than they were used to seeing. I replied that maybe it was because the attendees actually liked our coffee.

Think about it. We paid the equivalent of about 7 cents for a cup of a decent roast and the venue charged $3 to serve it. On a per cup basis, how much cheaper could the the venue be getting their ground coffee? Certainly, when you are buying thousands upon thousands of pounds of coffee, it may appear to be smarter to save a couple cents per pound. But they weren’t selling as much as they could.

I am sure that some government purchasing agent was proud of reducing the coffee expenditures by 10%, 20% or more.

But at what cost?

What we experienced was the result of staff focused on cost minimization, instead of profit maximization. Shaving a penny or two per cup in costs resulted in dramatic reductions in sales of a product with ridiculously high margin. For a few cents more per cup in costs, we showed how the venue could have been making so much more money and improving customer satisfaction.

The Canadian Telecom Summit moved to a privately owned venue near Toronto Airport for the next 15 years. When we first met with the other venue, the salesperson offered me a coffee. I asked what kind they served and following her response she asked, “Is there a particular roast you would like us to serve?”

There is a lesson in there about incentive plans for staff, and the way organizations measure success.

There can be a high cost associated with going with the lowest cost solution.

The following article appeared first on National Newswatch yesterday.

On November 9, 1965, a relay tripped on a transmission line at the hydro-electric plant in Queenston Ontario, near Niagara Falls, setting in motion a 13-hour power blackout that disrupted electric service for more than 30,000,000 people in Ontario, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. Excess power from that first line migrated to other power lines, that quickly became overloaded, causing their own relays to trip. In a matter of just 10 minutes, the blackout propagated across more than 200,000 square kilometres.

Most telephones (land lines at the time) kept working thanks to emergency generators that were a standard part of central offices.

Following the incident, new monitoring equipment, procedures and systems were introduced, but that didn’t prevent another large scale power grid failure 38 years later, in August, 2003, knocking out service for 55,000,000 in Ontario and 8 US states.

The root cause of the 2003 blackout was determined to be a bug in the alarm system software at FirstEnergy in Akron, Ohio. As a result, operators were unaware of the need to redistribute the power away from overloaded transmission lines. As a result, what should have been at most a manageable local blackout led to another collapse of much of the Northeast electric grid.

I told you those stories to help put last Friday’s Rogers outage into perspective.

We need to be realistic about what happened, and how we can mitigate the consequences of similar network failures. Friday’s network event was unprecedented. I told CHCH-TV News that in over 40 years of my involvement in North American telecom networks, I cannot recall an outage as broad in scale (nation-wide) and scope (spanning mobile and fixed networks, voice and data).

Still, most Canadians did not lose their communications services.

That’s worth repeating. Rogers does not operate a monopoly for any of its services. That should have been self-evident to the people who were tweeting about these so-called “CRTC monopolies” (or, my favourite from a so-called expert on a Twitter Space, “ogilopolies”). We didn’t experience a total communications blackout at any point while Rogers was restoring service.

As was noted on my Twitter stream, access to 9-1-1 services should have kept running. Wireless devices supported by Canadian telephone companies will automatically scan for a different network to complete a 9-1-1 call, if the native network is not available. If that did not work, the device suppliers and telecom carriers need to investigate why.

Some major customer network managers may need to re-examine their communications architectures to ensure sufficient carrier diversity. Some found poetic justice in the CRTC’s tweet that its phone lines were “affected by the Rogers network outage.”

Consumers may decide to re-evaluate the value proposition of bundling, perhaps choosing to pay a little more in order to separate their home connectivity from their mobile service provider.

But, let’s be clear about the overall state of Canada’s telecom competition policy.

If anything, last week’s network failure should serve to reaffirm Canada’s telecom policy promoting facilities-based competition. Customers served by alternate facilities-based providers kept operating. A review of the world’s LTE deployments shows that there are 10 LTE networks operating in Canada compared to 9 in the US, 3 or 4 in most European countries (Russia has 9; Sweden has 6; Denmark has 5).

Wholesale based service providers did not add any measure of network survivability. While one wholesale provider boasted on Friday that its services were 50% down, in reality, half of its customers were 100% out of service. The other half were running on a different facilities-based provider.

Canadians benefit from having robust competition among facilities-based carriers, and policies that encourage investment in diverse infrastructures.

As I observed on Friday, some used the network outage to advocate for structural separation, or for a government-run telecom access network. I couldn’t imagine how anyone would think that the people responsible for Canada’s airport fiascos, passport backlogs, or development of government payroll systems, or delivery of clean drinking water, could be entrusted with our telecommunications infrastructure.

If that hypothetical government network was down, I suggested that a week later, we might see a cabinet-level task force struck to discuss it. How is the government addressing the backlog in processing passports? By buying more chairs for people waiting in line. Seriously.

In mid-August 1966, the New York Times reported a mini-baby boom attributed to that cold blacked-out night, nine months earlier. That turned out to be a false urban legend.

That fake baby boom is another important lesson to apply in the wake of last week’s network event. Much misinformation will continue to circulate while technology professionals determine the root causes of the network outage and develop processes to try to avoid similar events in the future.

As I tweeted at the time, in the fullness of time, we will understand what caused the networks to fail. Industry-wide, carriers will undertake measures to avoid similar events and mitigate the impacts when future outages inevitably occur.

This year, Bell Let’s Talk Day – the world’s biggest conversation about mental health – is taking place on January 26.

Bell’s commitment to support mental health is especially meaningful to me. Back in 2010, when Bell first announced its plans to support mental health initiatives, I wrote a post “Talking about unmentionables.” In that post, I observed that “I grew up on the grounds of a children’s psychiatric research institute in London, Ontario, the son of a child psychiatrist.” In a way, mental health is the family business. My father is a psychiatrist and two of my siblings are clinical psychologists. So you can understand why I am taking a little time to promote the day.

It’s pretty easy for everyone to show support, even if you aren’t a Bell customer, by using the “BellLetsTalk” hashtag on social media. Every call or text by Bell customers adds even more to Bell’s support of Canadian mental health programs.

On Bell Let’s Talk Day, Bell donates 5 cents to Canadian mental health programs for every applicable text, local or long distance call, tweet or TikTok video using #BellLetsTalk, every Facebook, Instagram, LinkedIn, Snapchat, TikTok, Twitter and YouTube view of the Bell Let’s Talk Day video, and every use of the Bell Let’s Talk Facebook frame or Snapchat lens.

Over the past 11 years, there have been 1.3 billion messages of support, generating $121,373,806.75 in total Bell funding. #BellLetsTalk has become the most-used Canadian hashtag of all time.

I support Bell Let’s Talk initiative without reservation, and I encourage you to do so as well.

Keep being there for your friends and colleagues, keep listening to them, and on January 26, click to Tweet a message with #BellLetsTalk .

As I have described before, “When I studied statistics, we were told to look for “outliers” – results that appeared to be inconsistent with the rest of the data. If an observation is a potential outlier, you begin an analysis to determine whether a cause can be identified for the spurious result.”

There has been a lot of noise surrounding last month’s Telecom Decision CRTC 2021-181, the review and vary of the Commission’s 2019 Order (Telecom Order CRTC 2019-288) regarding final rates for aggregated wholesale high-speed access services.

The faux outrage alleges that the Commission has suddenly shown a predisposition favouring ‘facilities-based competition’ over ‘services-based’, when in fact, supporting investment has been the position of the CRTC, and the Competition Bureau, and various expert reports, and the Minister of Industry, (or ISED) for nearly 3 decades (since 1992).

So which decision is the outlier?

The discontinuity in wholesale rate policy was found in the rates set in 2019, not the most recent review of that decision issued in May of 2021. Following last summer’s determination by Cabinet (“Canada’s future depends on connectivity”), there should have been no surprise that the CRTC would need to carefully examine its 2019 determination.

It was pretty easy to see that the “outlier”, or statistical anomaly, in wholesale rate-setting was 2019, with hundreds of millions of dollars in windfall rebates and dramatically lowered forward-looking rates that have since been confirmed to be below the carriers’ costs. Looking at the 2019 rates, last August, Cabinet said “the Governor in Council considers that the rates do not, in all instances, appropriately balance the policy objectives of the wholesale services framework and is concerned that these rates may undermine investment in high-quality networks, particularly in rural and remote areas.”

Those who oppose the CRTC’s most recent decision argue that it leads to higher consumer prices. However, Bell Canada has asserted that its wholesale rates will drop by an average of 7%; in the case of wholesale rates from Canadian cable companies, some cost elements are increasing.

There was a time that the independent internet service providers celebrated the CRTC following its processes. Less than 2 years ago, CNOC recognized the need to balance a range of interests in reaching a decision. “The CRTC regulates the market to protect consumers and promote the public interest.”

CNOC’s own press release seemed to recognize that there are many more considerations involved in determining the “public interest” than simply lowering consumer prices. Indeed, there is a public interest cost associated with low, low prices as we have seen in other markets. Canada needs substantial levels of ongoing investment from the private sector to extend the reach of our networks into unserved and underserved areas. Setting wholesale rates too low can result in lowering incentives for rural investment, as I described, and as Canada’s Federal cabinet stated last August.

As CWTA President and CEO Robert Ghiz recently wrote, “Those who discount this balanced approach and argue in favour of one-dimensional policy-making willingly ignore the impact it would have on Canadians’ access to the internet and their ability to participate in the digital world.”

There has been a long-standing recognition that the most sustainable form of competition is found among those companies making the multi-billion dollar annual investments to “deploy, maintain and continually upgrade the physical networks that enable Canadians to connect to the internet.”

For nearly 30-years, Canada’s policy and regulatory frameworks have consistently favoured policies that support investment by facilities-based carriers. Independent ISPs have been able to thrive in this environment, continuing to gain market share with the wholesale rates that were set in 2016 and re-affirmed last month. Wholesale-based ISPs have grown nearly 50% between 2016 and 2019 (the last year covered by official data); with a 10% market share, independent ISPs are attracting about 20% of new customer growth, with the 2016 rates in place.

It is somewhat disingenuous for independent ISPs to endorse the CRTC and its processes when the Commission rules in their favour but call for regulatory reform and heads to roll at the CRTC when determinations go the other way. The Telecom Act has provisions that enable reviews and appeals of decisions.

The system works.

Canada’s future continues to depend on connectivity. Increasing connectivity depends on regulatory stability and a policy environment that continues to favour investment.