Yesterday, the US Court of Appeals for the District of Columbia released its decision [186 pages, pdf] in Mozilla v. FCC, better known as the challenge to the FCC’s Restoring Internet Freedom order.

A few excerpts are notable from my initial read. Among the first paragraphs is this summary:

Petitioners––an array of Internet companies, non-profits, state and local governments, and other entities––bring a host of challenges to the 2018 Order. We find their objections unconvincing for the most part, though we vacate one portion of the 2018 Order and remand for further proceedings on three discrete points.

On the question of broadband investment being inhibited by heavy-handed regulation and being promoted under the FCC’s lighter-touch approach:

We are, in short, unpersuaded by Petitioners’ and Intervenors’ objections to the Commission’s finding and their implicit claim that uncertainties associated with that finding render arbitrary the Commission’s overall judgment—that there are net public policy benefits from reclassification, based not only on a likelihood of increased investment and innovation but also on the absence of any “discernable incremental benefit relative to Title I classification.”

The court discusses the economic analyses at length, including a criticism of “Mozilla does not address shortcomings of the Free Press figures, pinpointed by the agency, including for example its failure to exclude investment abroad.”

As to the benefits of a “light-touch” regulatory approach,

the 2018 Order’s transparency rules—combined with the deterrent effects of “market forces, public opprobrium, and enforcement of the consumer protection laws”—can “mitigate potential harms.”
…
In sum, a “light-touch” approach can in the Commission’s judgment secure Internet openness and encourage innovation at lower cost than the Title II Order, while yielding unique benefits.

The court’s decision is quite readable, as are the 2 concurring opinions and the third appended opinion that concurs in part and dissents in part (with respect to the part of the ruling that vacates the FCC’s preemption of state law. While a number of media accounts seem to suggest that the ruling will allow state-by-state regulation of net neutrality, this is an incorrect reading.

There are discussions throughout the court ruling that appear to be quite relevant to Canada’s regulatory environment.

In “Keeping out of the way”, I wrote: “I continue to look optimistically to the future. As I have written before [such as here and here], the future will be brighter for Canadian innovation if the government would try harder to get out of the way.”

The Jewish calendar is based on a lunar cycle, with adjustments every few years where an entire month is added in order to recalibrate the religious harvest festivals with the proper seasons.

Within the Jewish community, people often speak about the holidays coming late, or coming early, relative to the common calendar. This year, the new moon on Sunday evening (September 29) marks the start of Rosh Hashana [literally, “head of the year”], welcoming the Jewish year 5780. It is just about right on schedule. As an easy relative measure, this year Christmas will take place right in the middle of Hanukkah. The sun and the moon are aligned.

Rosh Hashana starts a 10 day season of personal reflection, culminating in the fast day of Yom Kippur, the Day of Judgment, taking place this year on the evening of Tuesday, October 8, and continuing until night falls October 9th. In religious services, we hear the stentorian blast of a shofar [ram’s horn], triggering a period of introspection, examining the past year while looking forward to improvement in the year ahead. There are, of course, family dinners that customarily feature a number of traditional foods, like honey [for a sweet year]. As I have noted in previous years, it is very different from the kind of festivities and partying that mark the secular transition from December 31 to January 1.

The Canadian election on October 21 takes place at the end of the harvest festival of Sukkot, a week long festival that marks the end of summer and the beginning of the winter rainy season.

It is my hope that 5780 will be marked by peace, good health, by personal and professional growth and may it also be a year of inspiration for all of us.

Our offices will be closed on Monday and Tuesday (September 30 and October 1) and closed again the following Wednesday (October 9) to observe the holy days.

שנה טובה ומתוקה

“High spectrum prices can cause negative consumer outcomes, including lower coverage levels and slower data speeds.”

That’s just one of the findings of a new report released last week, by the GSMA. The report, “The impact of spectrum prices on consumers” [pdf], shows that countries with poor spectrum policies – policies which either inflate spectrum or delay spectrum assignments – are leading to millions of people being left unable to access mobile broadband services or experiencing reduced network quality.

The study is said to be the most detailed econometric study into spectrum pricing, considering more countries (64, including both developed and developing), more consumer outcomes (cost, quality and coverage) and the study controls for a wider range of other potential explanations for these outcomes, such as market competition, population density, timing of spectrum awards among others. “These findings have important ramifications for regulators, particularly when so many are trying to prioritise improved coverage and increased investment in 4G and 5G.”

The study provides the following recommendations:

1. Maximising revenues from spectrum awards should no longer be a measure of success
2. Auctions can deliver inefficient outcomes when poorly designed
3. Artificially limiting the supply of spectrum, including through set-asides, risks slowing services and inflating prices
4. Spectrum should be released to the market as soon as there is a business case for operators to use it
5. Policymakers should work with stakeholders to enable timely, fair and effective spectrum licensing to the benefit of society

The use of set-asides have been contentious in recent Canadian spectrum auctions. The study observes that “Governments often design awards with the intention of promoting competition and innovation in the sector – for example set-asides or reserved spectrum for a new entrant (or existing operator).”

However, the report says “While such policies may be designed with the right objectives in mind, they may also have unintended consequences if they are poorly designed or implemented and result in higher spectrum prices, thus harming consumers.”

There is a cost associated with spectrum policy, not all of which is financial. As Canada moves forward with development of auction policy for the next wave of spectrum, it is critical to consider the potential for unintended consequences to have significant impact on consumers.

As we move closer to the official start of election season, many political parties are trying to curry favour among the electorate by bashing telecom service providers.

Such positioning may be good politics, but not necessarily good policy.

We should look for greater balance. In the 2019 Policy Direction to the CRTC, there was an important balance of interests, between “competition, affordability, consumer interests and innovation.”

1. the Commission should consider how its decisions can promote competition, affordability, consumer interests and innovation, in particular the extent to which they
   1. encourage all forms of competition and investment,
   2. foster affordability and lower prices, particularly when telecommunications service providers exercise market power,
   3. ensure that affordable access to high quality telecommunications services is available in all regions of Canada including rural areas,
   4. enhance and protect the rights of consumers in their relationships with telecommunications service providers, including rights related to accessibility,
   5. reduce barriers to entry and barriers to competition for new, regional or smaller telecommunications service providers,
   6. enable innovation in telecommunications services, including new technologies and differentiated service offerings, and
   7. stimulate investment in research and development and in other intangible assets that support the offer and provision of telecommunications services; and
2. the Commission, in its decisions, should demonstrate its compliance with this Order and should specify how those decisions can, as applicable, promote competition, affordability, consumer interests and innovation.

It is particularly telling to examine how the text of the Policy Direction changed from its preliminary version to the final Order. These changes, which added the word “investment” in section (a)(i) and strengthened the concept of investment in high quality services “in all regions of Canada including rural areas”, are found in my June blog post.

As I wrote a few months ago, “most government programs continue to focus on increasing ‘supply’, extending access to broadband. We need to ensure there are strategies to drive ‘demand’: increasing adoption rates among groups that could subscribe, but have not. That is a problem across all geographies, and is perhaps more pronounced in urban markets.”

The demand side of the equation is often overlooked when governments deal with universal broadband adoption. That isn’t just a matter of price, but understanding all the barriers.

It is easy to call for measures that lower prices. It is more responsible to set out a policy platform that understands the balance between competition, affordability, consumer interests, investment and innovation.

Ask candidates how their platforms meaningfully ensure that all Canadians, those in urban and rural areas, will have access to high quality, innovative services.

The week before Labour Day has always felt strange for me. It is the last week of summer vacation for most Canadian kids.

When I was a kid, we would try to cram so much joy into those last few days of freedom, while our parents would try to force us to face the more practical realities of checking on school supplies and arguing about whether we had suitable clothes to make a positive impression on the first day of classes. Those last few days of vacation never seemed to be filled with the same level of joy as the first few days, as we hummed Alice Cooper’s anthem to ourselves.

It has been years since I have been directly involved in getting myself or my kids ready for the start of the school year. Still, the arrival of cooler August evenings make me reflect on summer vacations as a kid and with my kids.

I hope you have been able to find time to get re-energized this summer.

In early July, I mentioned that this would be a less active summer for me on these pages as I tended to a few important family matters. It will be mid-to-late September before I can start to return to normalcy in my schedule. In the meantime, I have tried to stay on top of the biggest issues over the past couple months and share my independent perspectives on trends in Canada’s communications sector. Thank you for allowing me to indulge my family priorities.

Enjoy the last few days of summer. Thank you for your continued support.