I have frequently written about government keeping out of the way. The phrase “out of the way” appears in about 25 of my posts.

Twice, I used the same title, “Getting out of the way” [2012, 2016]. Earlier this year, in “Let the marketplace work”, I describe government policies and regulations inhibiting capital investment by the telecom sector.

So, it was with interest that I read a recent article on “The Hub”, “Want to be a more productive country, Canada? Get the government roadblocks out of the way” by Jerome Gessaroli. He says “policies relying on government intervention to replace the free market seldom produce improved growth and productivity.” His article includes 4 policy recommendations relating to government maintaining a smaller economic footprint.

Mario Draghi’s newly released report for the European Union, “The future of European competitiveness” [Part A (A competitiveness strategy for Europe) pdf, 3.4MB | Part B (In-depth analysis and recommendations) pdf, 11.5MB], cites “inconsistent and restrictive regulations” among the hindrances for innovative company growth. The report calls for reducing the regulatory burden imposed on European companies. “More than half of SMEs in Europe flag regulatory obstacles and the administrative burden as their greatest challenge.” According to the report, “Regulation is seen by more than 60% of EU companies as an obstacle to investment”.

In other words, I’m not alone in wanting government to stay out of the way.

A few years ago, I quoted Ronald Reagan’s 1986 remarks to the National White House Conference on Small Business. “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

That approach gives the appearance of government doing something, but rarely achieves a positive long-term outcome. It seems to be where Canada is heading with its legislation on the digital economy. The Online News Act and Online Streaming Act already drove unintended consequences, as predicted. In addition, Canada is risking a trade dispute with the US over its approach to taxing digital services.

It is so very tempting to intervene in the marketplace. It takes much stronger leadership to trust in the power of competitive markets. Look at the telecom market. Canada ensured there are 4 well-capitalized facilities-based wireless service providers operating in most of the country, including all population centres. These service providers have sufficient spectrum and technology to compete in both mobile and fixed markets.

Continued regulatory intervention in the marketplace threatens to return Canadian telecom to the haphazard Calvinball era of a decade ago. Such an environment discourages investment, precisely the opposite of what is needed to drive productivity.

Government needs to try a new approach. Stand aside.

A couple recent papers crossed my desk that examine bridging the digital divide. The papers try to help understand factors that limit adoption of residential broadband.

Former CRTC Chair Ian Scott released a paper via IRPP (the Institute for Research in Public Policy), “Conquering the Next Frontier in Bridging the Digital Divide” [pdf, 478 KB]. The paper sets out recommendations for improving internet access in underserved communities.

He observes, “Low-income Canadians, regardless of where they live, struggle to afford the technology and internet plans needed to take full advantage of the digital economy.”

The September 2024 issue of Telecom Policy includes an article examining the US Government’s Affordable Connectivity Program (ACP). “Understanding uptake in demand-side broadband subsidy programs: The affordable connectivity program case”.

The results of this study suggest several opportunities for adjusting ongoing initiatives and designing new direct support programs for broadband that should be of interest to policymakers at different administrative levels (federal, state, county and even more local) as well as to other stakeholders. The positive correlation between ACP enrollment and areas with a large share of households in severe poverty underscores the social dimension in ACP enrollment decisions. Since not all eligible households were enrolled in ACP, it is likely that “early adopter” households conveyed information through local networks about the program’s benefits. This may have encouraged other low-income households to enroll sooner than they might otherwise.

The researchers found that local housing policies may help encourage families to subscribe to low-cost internet programs. The paper notes that the FCC established a pilot program to fund ACP outreach through local housing authorities and housing advocacy organizations. The authors also observed a positive association between the presence of public libraries and ACP enrollment rates, indicating that anchor institutions may facilitate enrollment.

On September 24, IRPP will be hosting a lunchtime seminar (in Ottawa and online via Zoom). “The Next Frontier in Canada’s Digital Divide” is being promoted as a conversation about digital connectivity across Canada.

Indigenous and northern communities are still behind the rest of Canada in terms of the availability of internet at speeds needed to take full advantage of essential services such as health care, education and remote work. Low-income Canadians also struggle to afford the technology and internet plans needed to participate in the digital economy, including government services and information, banking, health care, education and employment. To overcome these gaps, governments should pursue new approaches that address the needs of underserved communities and improve the affordability of the internet.

In “Mapping the digital divide”, I wrote that it isn’t enough to have affordable broadband at everyone’s doorstep. Do we even agree on what “affordable broadband” means. I have frequently called for more research to understand those factors that inhibit adoption. There are populations with access to broadband, even where targeted affordable options are available.

Do we need to invest more in developing digital skills?

How do we develop strategies to overcome digital phobias among underserved populations?

As Artificial Intelligence tools become more pervasive, I wonder about the impact on ‘real’ intelligence.

Sixteen years ago, Nicholas Carr had an article in The Atlantic entitled “Is Google Making Us Stupid?”

Over the past few years I’ve had an uncomfortable sense that someone, or something, has been tinkering with my brain, remapping the neural circuitry, reprogramming the memory. My mind isn’t going—so far as I can tell—but it’s changing. I’m not thinking the way I used to think. I can feel it most strongly when I’m reading. Immersing myself in a book or a lengthy article used to be easy. My mind would get caught up in the narrative or the turns of the argument, and I’d spend hours strolling through long stretches of prose. That’s rarely the case anymore. Now my concentration often starts to drift after two or three pages. I get fidgety, lose the thread, begin looking for something else to do. I feel as if I’m always dragging my wayward brain back to the text. The deep reading that used to come naturally has become a struggle.

I have referenced that article a few times on these pages. It came to mind this past weekend as I watched a segment of CBS Sunday Morning by David Sedaris. “The way you talk to a person says a lot about you, of course, but so, too, does the way you talk to a device.”

I rarely drive anywhere without using the Waze app on my phone to get real-time traffic updates. As a result, who needs to rely on “traffic on the ones” from the local news radio? In the past, I maintained a mental phone directory of hundreds of numbers. Now, voice commands mean I no longer need to commit phone numbers or addresses to my prefrontal cortex and hippocampus.

For most of the past two months, I had youthful visitors who enjoyed driving Alexa crazy with requests like, “Alexa, play Baby Shark”, and “Alexa, what is the weather today?” Of course, Alexa couldn’t be driven crazy; that privilege was reserved for just the owner. My wife insisted on the kids adding “please” and “thank-you” to the requests in the hope they would develop some useful skills when dealing with real-life assistants. (As though Alexa cared.)

Despite the availability of a wide variety of screens to entertain 5 kids ranging in age from 10 months to 10 years, down-time was often spent reading books. Real, old-fashioned paper books. Each of the kids had their own book bag of curated titles, restocked a few times through the summer. The bags were adorned with Canadian imagery, as part of my wife’s not-so-subliminal campaign to get the kids to move back home.

I appreciate the efficiencies of the latest AI tools.

We have to marvel at the possibilities enabled by advancements in Artificial Intelligence. And, I often think back to working at Bell Labs with some of the people who created the basics for what is now coming to market.

But, I also wonder about the impact of Artificial Intelligence on ‘real’ intelligence. What will be the impact of these technologies on our abilities to develop the next wave of advancements?

Are our minds made stronger by a foundation in classical education methods? As kids head back to school, do we still need to maintain focus on the old-fashioned 3-Rs: reading, writing and ‘rithmetic?

What do we mean when we talk about affordable broadband?

As I discussed earlier this week, the CRTC’s latest wholesale policy is intended “to ensure that Canadians benefit from affordable access to high-quality Internet services.” But, the CRTC didn’t define what it considers to be affordable. I wrote that the Commission is misusing the term “affordable” as a euphemism for “lower prices.”

If you search for “affordable” on my website, you will find more than 200 different blog posts.

There really isn’t an easy answer to the issue of affordability. The knee-jerk reaction by some is that lower prices are the answer. Drop prices across the board and the service becomes affordable for all, right? Such an approach would certainly be popular. Who among us wouldn’t want lower prices for anything? For everything! Doubly so for a service that sends a bill each month. But in reality, lower average prices simply won’t solve the issue of affordability for the most vulnerable households. These homes need special targeted programs for a variety of essential services, including broadband services.

As I wrote 3 years ago, there are a wide range of options available for affordable broadband services. As that post describes, some service providers have broadband options as low as $15 per month for service operating at the CRTC’s service objective speed.

Cutting prices to that level across the board simply isn’t economically viable. As I wrote last year, affordability is a complex and multifaceted concept. Affordability varies depending on the context and the goods or services being considered. Last November, I wrote about a report examining the affordability of wireless and wireline services in Canada.

We all want to see universal adoption of today’s advanced communications services. Through the operations of various affordable broadband programs, we have learned there are factors beyond price that inhibit some from getting online.

The communications industry stepped up and introduced targeted affordable broadband services despite government resistance, as described in Ted Woodhead’s post last week. The industry-led (and industry-funded) program is not subject to the political vagaries we see in the US Affordable Connectivity Program.

It was wrong for the CRTC to set an objective for “affordable access to high-quality Internet services” without a more complete discussion or definition. The way the term was used in the wholesale broadband policy strikes me as an attempt to score political points. The Commission might consider investing its attention to the more serious challenge of identifying the non-price factors inhibiting adoption of digital connectivity.

It can be easy to lose focus, to lose sight of the prize. In early July, I wrote “Keeping priorities in order”, trying to prepare my regular readers for a summer with far fewer posts than usual. I typically write a couple posts per week but as I warned, I’ve had 5 higher priorities visiting for much of the summer. I kept my priorities in order. So here we are, August 19, with my first post this month.

Maintaining sight of the prize seems relevant to my impression of last week’s CRTC decision. In “Competition in Canada’s Internet service markets”, the CRTC’s summary begins with a single concise statement. “The Commission is taking action to ensure that Canadians benefit from affordable access to high-quality Internet services.”

That is a reasonable objective: “affordable access to high-quality Internet services.”

Note, the CRTC did not say the prize was counting the number of competitive internet service providers (ISPs). From the outset, we are told the target is consumer focused. “Ensure that Canadians benefit from affordable access to high-quality Internet services.”

It is through this lens that Canadians should read Telecom Regulatory Policy CRTC 2024-180.

How does the Commission envision us getting there? Indeed, how does one define affordable access? What I consider affordable is different from what other people due to a wide range of factors. I suspect the CRTC is using the term “affordability” as a euphemism for lower prices. In reality, that doesn’t solve the problem of affordability for the most vulnerable households, but wins political points for a wide range of consumers (voters).

What qualifies as a “high-quality internet service”? What utility to I get from my connection? What are the household financial circumstances? How many people share the connectivity? Is it used for business and personal use? What kind of devices do I plan to use for connectivity?

I couldn’t find answers to any of these questions in the decision.

There are some interesting statements set out as facts that should have greater supporting arguments. For example, at paragraph 17 we read

17. Since that time, the industry has continued to develop. The Commission observes the following:
    • Consumers have fewer choices when buying Internet services: in recent years, competition has been declining. By the end of 2022, independent ISPs served significantly fewer customers than they did at the start of 2020. At the same time, several of the largest independent ISPs have been purchased by incumbents.
    • The incumbents are using wholesale HSA services: various incumbents or their affiliates are increasingly using wholesale HSA services both inside and outside their traditional serving territories. This is different than in the past, where independent ISPs accounted for substantially all use of wholesale HSA services.
    • Not all Canadians are connected to higher-speed Internet services: while more than 83% of households and businesses reached by the incumbents have access to at least one gigabit-speed Internet connection, ISPs must continue to deploy and upgrade networks to ensure all Canadians can benefit from these services.
18. These facts suggest that the Commission’s prior regulatory approach, which prioritized facilities-based competition, has not brought about sustainable competition that delivers more choice and more affordable services to Canadians, nor has it resulted in universal access to higher-speed Internet services. The Commission must therefore set objectives that continue to incentivize network investment and facilities-based competition while supporting increased choice and greater affordability for Canadians.

I could devote an entire blog post to paragraph 18 and the factual flaws contained within. It appears to be policy-based fact making, rather than the other way around.

Considering the objective of affordable access to high-quality internet service, I found it somewhat strange to find no mention of Connecting Families, or any other affordable connectivity initiative to be found in the CRTC’s policy document. Ted Woodhead recently wrote an excellent post, “The FCC’s Affordable Connectivity Program ending in the United States”. His post talks about the key differences between the American government-led initiative, and Canada’s innovative carrier-developed and funded programs. Ted and I were there from the beginning.

I am sure I will return to paragraph 18 at a later date.

For now, let’s look briefly at the “facts” set out in paragraph 17. The CRTC says “Consumers have fewer choices when buying Internet services”. I’m not convinced. It isn’t as clear to me that there are fewer choices or, for that matter that competition is declining. Prices are in decline and service providers are investing billions of dollars in network upgrades. The second bullet seems to contradict the first one: “various incumbents or their affiliates are increasingly using wholesale HSA services both inside and outside their traditional serving territories”. The exit of smaller, wholesale-based ISPs in favour of better capitalized “incumbent” affiliates could be celebrated as providing greater choice and bundled services.

The decision refers to the Competition Bureau observation, “while any bundling by the incumbents could be a barrier to entry for smaller ISPs, the competitive benefits of an incumbent accessing wholesale HSA services outside its footprint likely outweigh the risks.”

As the decision notes:

55. In setting out its regulatory framework, the Commission seeks to create opportunities for innovative competitors to differentiate themselves and bring new choices to consumers. Importantly, this is not the same as guaranteeing that one type of competitor can profitably compete without risk. In respect of wholesale HSA services, the Commission enables wholesale access at just and reasonable, cost-based rates. It is then up to competitors to find commercial strategies that deliver an attractive value proposition that responds to consumers’ needs.

Too often, people lose sight of the prize. The wholesale framework is a means to an end, not an end in and of itself. It is not the CRTC’s role to preserve the independent wholesale-based competitive ISP industry. We do not guarantee “one type of competitor can profitably compete without risk.”

The target is to ensure Canadians benefit from affordable access to high-quality Internet services. And, despite what the CRTC said in paragraph 18, that is where the industry has been heading.