Building resilience in telecommunications in Canada and Beyond. That is the topic for a workshop taking place in downtown Toronto on the afternoon of May 14, 2024. The event is hosted by the Ivey Business School.

Over the past couple of years, I have written about network resilience a few times:

• Reliable and resilient networks (January 23, 2024)
  I observed that weather-related service disruptions will likely be a bigger factor in coming years. In a competitive environment, I asked what is the role of regulators in setting standards or objectives for reliable and resilient networks?
• Network resilience (April 14, 2023)
  This post looked at the report released by The Canadian Security Telecommunications Advisory Committee (CSTAC), aimed at improving network resilience and reliability.
• Time to rethink resilience (October 11, 2022)
  While it is impossible for businesses to prepare for all potential disruptive events, mitigation strategies can dampen potential damages.

Network resilience was incorporated in the 2023 Policy Direction to the CRTC. The Canadian government oversaw the creation of a multilateral memorandum of understanding for mutual assistance in the Fall of 2022. The CRTC has not yet released its final determinations in its “Development of a regulatory framework to improve network reliability and resiliency – Mandatory notification and reporting about major telecommunications service outages”, launched a year ago. Regional governments have increasingly been concerned with the Emergency Management and Climate Readiness. Canadian consumer groups have raised concerns about network outages, prompting responses from both government and industry. The industry is investing heavily for resilience in wired infrastructure and wireless networks, including satellite.

In the Canadian context, discussions include examining the roles of government funding mechanisms, outage reporting, network access, and the role of layered and competing infrastructures. Internationally, both geopolitical and domestic concerns have brought resilience to the highest concerns among Canada’s main trading partners and allies. New initiatives are underway in the United States, the European Union, and South Korea, among others.

This workshop aims to explore policy, regulation, business strategy and institutional frameworks for an increasingly resilient Canada – in a world where threats to resilience (climate events, cyberattacks, war) surge forth without regard to national borders or government mandates, with digital ecosystems of international reach. Speakers from Canadian government, industry and consumer organizations will join with international experts for an engaging debate and important announcements. New initiatives, frameworks and concepts will be explored by an inquisitive debate and presentations.

Speakers from Canadian government, industry and consumer organizations will join with international experts for an engaging debate and important announcements. New initiatives, frameworks and concepts will be explored by an inquisitive debate and presentations.

Confirmed speakers include:

• Andre Arbour, Director General, Telecommunications and Internet Policy, ISED
• Erik Bohlin, Professor, Ivey Business School, and Ivey Chair in Telecommunication Economics, Policy and Regulation
• Seongcheol Kim, Professor, Korea University
• Phil Moore, VP, TELUS
• Romel Mostafa, Director, Lawrence National Centre for Policy and Management, Ivey Business School
• Eli Noam, Professor, Columbia University
• Jieun Park, Korea Institute of Science and Technology
• Adam Scott, Vice Chair, CRTC
• Georg Serentschy, Serentschy Advisory Services

This workshop, Building Resilience in Telecommunications – In Canada and Beyond, is funded in part by the Ivey Chair in Telecommunication Economics, Policy and Regulation, as well as the Lawrence National Centre for Policy and Management at the Ivey Business School. Registration includes lunch, all sessions, and a cocktail reception to wrap up the day. It all takes place at Ivey’s Donald K. Johnson Centre in the Exchange Tower at 130 King Street West in the heart of Toronto’s financial district.

The full agenda [pdf, 660KB] and registration information are available on the event website.

When looking at telecom services, regulators should focus on whether the market is sustainably competitive. That seems to be the message arising from merger reviews in Europe.

After years of focus on the number of carriers, regulators are taking note of the impact of hypercompetitive markets on investment. UK service providers are unable to cover their cost of capital. As a result, operators are unable to fund network upgrades. Vodafone and Three UK intend to merge. The Competition and Markets Authority (CMA) in the UK is moving into the next phase of its review of the merger.

In announcing its next phase, CMA said “the deal, which combines 2 of the 4 mobile network operators in the UK, could lead to mobile customers facing higher prices and reduced quality.”

The CMA’s Phase 1 investigation found that Vodafone UK and Three UK provide important alternatives for mobile customers. Both have made significant investments in their networks in recent years – which includes the rollout of 5G. Three UK is also generally the cheapest of the four mobile network operators. The CMA is concerned that combining these two businesses will reduce rivalry between mobile operators to win new customers. Competitive pressure can help to keep prices low, as well as provide an important incentive for network operators to improve their services, including by investing in network quality.

Vodafone and Three UK replied, noting “The current market structure has resulted in the quality of mobile network services in the UK lagging significantly behind other European countries. Vodafone UK and Three UK are sub-scale, unable to cover their cost of capital, and constrained in their ability to invest and compete effectively against the two market leaders.”

In February, OpenSignal reported that the UK ranked 22nd for 5G availability and download speeds when comparing to 25 European countries. The UK has the slowest download speeds in the G7. By way of comparison, I recently wrote that Canada is consistently a leader in availability and speeds.

There is a reason why EBITDA margins are necessarily higher among facilities-based telecom competitors. By definition, EBITDA measures the earnings before consideration of interest, depreciation, and amortization. Each of these are costly factors for companies with large investments in infrastructure. If the EBITDA margins are not sufficiently strong, network operators will be unable to maintain investment.

Last October, I wrote about a CRTC arbitration on MVNO access, where the Commission determination explicitly said “This decision helps to promote access to affordable telecommunications services for Canadians and to foster sustainable competition and continued investment.” At the time, I asked “To what extent does it provide clues for the way the CRTC will approach revisions to the wireline wholesale framework?” I wrote about sustainable competition two years ago, showing how the CRTC and Competition Bureau seemed to be at odds in their approaches.

A singular focus on driving lower prices fails to appropriately consider balancing competing policy objectives. In Canada, telecom policy seeks a balance between quality, coverage and price. I’d submit that the number of competitors should be a less important factor for policy makers. The more important consideration should be fostering a sustainably competitive market to deliver overall consumer benefits.

Is it possible to prebunk misinformation?

Is there a vaccine for fake news?

A recent story on 60 Minutes caught my eye and steered me toward the Social Decision-Making Lab at Cambridge University. The director of the lab, Sander van der Linden, told 60 Minutes that misinformation – that which is outright false or incorrect – represents just a small amount of people’s overall media diet. “The much bigger part is what we would refer to as misleading information, half-truths, biased narratives, information that is presented out of context.”

In collaboration with partners at Yale and George Mason University, the Cambridge lab recently published “Inoculating the Public against Misinformation about Climate Change”. The study is said to be a kind of “psychological vaccine” against misinformation.

A growing body of research suggests that one promising way to counteract the politicization of science is to convey the high level of normative agreement (“consensus”) among experts about the reality of human-caused climate change. … evidence is provided that it is possible to pre-emptively protect (“inoculate”) public attitudes about climate change against real-world misinformation.

There is so much bad information circulating on the internet, much of it placed as commercially driven click-bait. Other sources include politically motivated state actors seeking to disrupt social cohesion. Misinformation and disinformation are motivating many of the most contentious sections of Canada’s Online Harms Act, Bill C-63. The psychological research being led by Cambridge suggests countering bad information with good information. The researchers found that the way we perceive what other groups believe serves as a cue for overall informational judgment. So, conveying facts that scientists and experts are convinced about an issue can increase perceived consensus and acceptance across an ideological spectrum, either directly or indirectly.

The research suggests that communicating a scientific consensus on such issues as vaccines or human-caused climate change should be accompanied by information warning that politically or economically motivated actors may seek to undermine the findings. In effect, audiences should be provided with what they call a “cognitive repertoire” — a basic explanation about the disinformation campaigns — to try to pre-emptively refute such attempts. The research suggests that communicating a social fact, such as a high level of agreement among experts, can be “an effective and depolarizing public engagement strategy.”

According to van der Linden, “everyone is obsessed with influencing each other, but in fact there’s almost no program of research that looks at helping people resist unwanted attempts to persuade them. So that’s where my interest is: helping people resist persuasion when they don’t want it.”

Last fall, I wrote about the cost of misinformation. What if we found ways to prebunk misinformation, inoculate people to be able to detect half truths and lies online?

It seems unlikely that we will be able to block the flow of bad information. Does inoculation represent a better approach, enabling Canada to counter misinformation by censuring, not censoring?

There are signs of accelerating progress in cellular and satellite convergence. A recent report from Scotiabank lead with an attention grabbing headline, “Mobile Carriers Poised to Create $1.0T in Equity in the Direct-to-Cell Revolution”.

Last year, I wrote about the FCC taking steps to explore “innovative collaborations between satellite operators and wireless companies”. In February, the FCC issued a 160-page “Report and Order and Further Notice of Proposed Rulemaking” to establish what the agency called the world’s first regulatory framework for terrestrial to space inter-connectivity. The intent is “to enable collaborations between satellite operators and terrestrial service providers to offer ubiquitous connectivity, directly to consumer handsets using spectrum previously allocated only to terrestrial service.”

A March 11 Scotiabank report discussed work underway between AST Spacemobile and Latin American operator AMX as well as TIM Brasil. The report provided capital cost metrics that demonstrate why there is such a high level of interest in interoperability. Scotiabank is calculating the cost of connecting a subscriber in a remote area with a traditional terrestrial tower at a minimum of US$111/subscriber. This estimate includes “civil infrastructure, radio access network [RAN], backhaul, core, software, and permitting”. In lower population density areas, Scotiabank says the cost could be as high as US$500/subscriber.

By way of comparison, the bank says “SpaceMobile’s BlueBird satellites could do the job for US$10/sub”, based on 750 MB of data consumption per month, “an ideal solution for distant areas out of coverage”.

Recently, RCR Wireless News reported on developments from the Satellite 2024 conference. According to the RCR report, many of the players are talking about the need to get “orders of magnitude improvement in airtime pricing”. During one of the panel discussions, Mark Dankberg, CEO of ViaSat said that “while satellite thinks of pricing in terms of dollars-per-megabyte, terrestrial network operators are thinking dollars-per-gigabyte.”

Nonetheless, work on cellular and satellite convergence is progressing. A year ago, Rogers and SpaceX announced an agreement enabling Canadians to stay connected beyond the limits of terrestrial wireless networks. Last week, the Canadian government agreed to lend more than $2 billion to Telesat to help fund development of its broadband satellite constellation.

How will the economics work? According to Scotiabank, cellular and satellite convergence could be a “structural solution to a cash-strapped telecom industry.” The bank estimates that the global telecom industry invests more than US$310B in capital each year, in addition to US$68B in tower leases. Scotiabank estimates mobile carriers spend more than 15% of consolidated capital each year in RAN investments in lower density or non-profitable areas, “frequently to comply with license requirements.” As a result, Scotiabank believes satellite-enabled connectivity could represent US$46.5B in annual capital savings for mobile operators.

With a trillion dollars in equity potential, cellular and satellite convergence is truly the next space race.

Every grocery shopper has experienced shrinkflation. Headline prices for asparagus, previously quoted by the pound, are now often listed for 325g bundles – you end up with 25% less for the money. Boxes of cookies and snacks are smaller; cereal boxes shrank. Prices for items may appear to hold constant, but the packaging is smaller. The headline price disguises the fact you are getting less.

Last month, I wrote “Statscan says cellphone prices are plunging – and they are”. In that post, I used a purely hypothetical apartment metaphor to describe how Canadians might choose to lower their monthly bill for a similar size apartment, or pay the same amount and get a bigger place with better quality. That might be the case if the cost of accommodations happened to be falling. If only!

But, despite these inflationary times, Canadian telecom – especially Canadian mobile wireless service – is actually delivering more value for less money.

A recent post by the Canadian Telecommunications Association talks about this effect in terms of grocery shrinkflation.

In a world of shrinkflation, Canada’s telecom sector stands apart.

• Lower prices – more data

  While prices for most things have increased, prices for both home internet and wireless services are declining. According to Statistics Canada, overall consumer price inflation has risen by 18.5% over the last five years, but prices for cellular services have decreased by an average of over 47% and prices for internet access services have decreased by an average of nearly 8% during the same period.

  For example, according to the Government of Canada’s annual telecom price study, in 2019 the average price of a wireless plan that offered 1GB of data (and 1200 call minutes and 300 texts) was approximately $65 per month (or approximately $75 in today’s dollars). Today, for $65, a consumer can get a plan that offers 75GB of 5G data and unlimited talk and text Canada-wide, with no overage fees. This amounts to a 98.6% decline in price per GB (without factoring in additional savings attributable to unlimited talk and text and zero overage charges). Smaller data plans are also available, like 30GB wireless plans for $34 and $50 for 60GB, which offer more data at lower prices than what was available just a few years ago.

• Faster Speeds

  If you check the label on your favourite packaged good you may find that one or more ingredients have been switched for a cheaper and lower quality ingredient. The opposite is the case in telecom. Though prices are declining, the quality of service has steadily increased. For example, the average mobile data download speeds in Canada have increased by 90% over 5 years¹ and fixed broadband download speeds by nearly 400%². With faster speeds, Canadians can stream movies, play games online, and join video conferences while on the go.

• More coverage.

  While other industries are shrinking the size of their products, Canada’s telecom providers are steadily expanding the coverage of their wireless and fixed networks, with the vast majority of Canadians now having access to mobile wireless and high-speed internet services. And with investments being made in new innovations like cellular-to-satellite communications, Canadians will soon be able to connect from even the most remote parts of Canada.

…
While other industries are shrinking their products, the telecom sector is giving more, not less. By investing billions each year, it is providing Canadians with more data, faster speeds, and wider coverage, all at lower prices.

I shamelessly stole the shrinkflation metaphor last week when I was quoted by Canadian Press talking about the latest Statistics Canada consumer price index report. In February, the cellular price index was down more than 25% compared to a year ago.

Price declines in the national inflation report could indicate that consumers are getting more bang for their buck through new offers, such as bigger data packages, international roaming perks, or voice-to-text voicemail services.

“They’re either getting more for the same price or they’re paying less for the same thing,” said Goldberg, who likened it to “the opposite of shrinkflation.”

“If you go into a grocery store and the box of cereal on the shelf is $3.99, but last month it was a 500-gram box and this month it’s a 400-gram box … you’d say prices went up 25 per cent. In this case, it’s the opposite.”

For years, Canadian telecom policy has recognized the value of investment in telecommunications infrastrucutre. In approving the merger of Orange and MasMovil, I noticed that Spain has recently adopted a similar view, with Digital Transformation Minister José Luis Escrivá saying “the competitiveness of a country partly depends upon its digital infrastructure and its connectivity.”

Here, we phrase it simply. “Canada’s future depends on connectivity”.