Another year is about to come to a close.

Over the past couple of months, a lot of things have been going on – some good, some not so much – that have given me time to quietly reflect while doing some long distance driving. A year-end post is an appropriate time to share some of those thoughts.

This year, I realized that I have been consulting a fair bit longer than the amount of time that I had a ‘real job’ (as my dad would call it). The past 38 years in the telecommunications sector (22 years of consulting) have produced more than 2750 blog posts, although I will acknowledge that the past year continued to witness a decline in production. With just under 70 posts over the past year, I blame the amount of time I spend expounding in 280 character bursts on Twitter (although there are also a couple little boys who continue to provide welcome distractions from my desktop).

The past year brought us the national launch of Connecting Families, an initiative that has been on my year-end wish list for about 10 years, as my frequent readers know all too well. As a country, the traditional focus for government programs has been to spend money stimulating the construction of broadband facilities. A much tougher job has been to examine the factors that have limited broadband adoption by various segments of the population. There is more than just a rural/urban split in Canada’s digital divide. Connecting Families is an important step in the right direction, following the private sector leadership from TELUS and Rogers. Last week, ISED Deputy Minister John Knubley informed Parliament’s Standing Committee on Public Accounts that 3000 households had signed up for Connecting Families in the first 2 weeks of the program. That means that at least 3000 homes with kids will be able to start the next school term with a connected computer, enabling those kids to do their homework and socialize the ways most kids do. Connecting Families was a long time in the making, but it is still only a start. We should not be satisfied until every school-aged kid has access to a connected computer at home.

At this time last year, I wrote:

I can’t help but wonder what kinds of innovative pricing plans are being inhibited because Canada’s more restrictive regulations on internet access compared with the light touch approach approved last week by the FCC. Canadians have been denied the choice of plans with innovative pricing structures offering mobile TV from one service provider and another carrier offering mobile music. As predicted, the CRTC’s intervention resulted in no customers seeing lower prices while thousands ended up paying more.

Industry Minister Bains recently said “An open internet is critical to our economy and our democracy.” I agree. We need an open internet.

But, I don’t believe that an open internet has been called into question by the FCC. The real question is the level and type of government intervention required to achieve an open internet, while still preserving an environment that fosters innovation and investment.

I’m not convinced Canadian consumers benefit from the CRTC having extended net neutrality rules beyond the elements that were recommended by the Telecom Policy Review Panel. I don’t share the view of some others that the US will lose its status as the innovation leader, and I suspect US consumers will find that they benefit from the framework south of the border.

I continue to question the increasing level of government intervention that already exists for Canada’s internet services. The CRTC’s “Proceeding to establish a mandatory code for Internet services” [Internet Code] continues down the recent path by the Commission to intervene in retail markets it has previously found to be competitive. 

Starbucks recently announced it is going to block porn on its public WiFi network. McDonalds already filters content on its WiFi access network. Of course these companies should be able to decide what services are provided to customers. But from a regulatory standpoint, I wonder if there is a clear enough line that defines when a provider of internet access formally becomes an Internet Service Provider. At many hotels and airports, there are charges for internet services – in some cases for basic service; in other cases, charges apply for premium speeds. I’m not suggesting the CRTC should regulate every hotel and restaurant WiFi operator. If anything, it may show why extending retail internet regulation can lead to rules that are imbalanced, inconsistent, and potentially unnecessary.

A recent editorial in the Globe and Mail examined the section in Finance Minister Bill Morneau’s fall economic update [pdf] calling for a focus on smarter government regulations to improve the efficiency and productivity of the Canadian economy.

Preserving the environment, ensuring health and protecting consumers are all core functions of government. At issue is not the what of regulation, but the how. It’s about making sure government rules are getting the most regulatory bang while costing the economy the least actual bucks.

This is, unfortunately, just about the least sexy area of economic policy. It involves no multibillion-dollar infrastructure announcements, no ribbon cuttings and no canapés at black-tie galas. Instead, it demands lots of hard thinking and careful accounting, leading to many small rule changes adding up to potentially large benefits for the overall economy.

These kinds of mental exercises have made it so that I have enjoyed facing the work day for the past 38 years. New challenges, new technologies and new issues arise every day.

A final observation. The first decade of my career didn’t involve any regulatory work. When I first started to prepare for sworn testimony and cross examination (as we did in the olden days in front of the CRTC), I envisioned an adversarial relationship with opposing counsel. I was on the witness stand for a week and when I finished, I was surprised when one of the top lawyers from “the other side” came up to me at the break, shook my hand and that of my lawyer and said with complete sincerity that I had done a great job. I was shocked. An hour earlier, he was looking for any way to discredit my evidence, and here he was, congratulating me, sharing stories about nothing important, and wishing me a safe trip back home. From that point on, I began to understand the collegiality that existed between the parties involved in regulatory proceedings. Like Sam Sheepdog and Ralph Wolf in the old cartoon.

One of the first blog posts I wrote (12 years ago) was “4 degrees of impersonal communications” that spoke of an indifference to social norms associated with the relative anonymity of the internet. Perhaps the polarizing nature of social media interactions has contributed to a general deterioration in the atmosphere, with venomous personal attacks on those expressing opposing viewpoints; decisions going the wrong way are met with attacks on the regulator. 

I can’t offer a solution to this phenomenon, but we should all be concerned about the quality of civil discourse among the participants, and demand better from thought leaders. 

Over the break, please take time to look at the program for The 2019 Canadian Telecom Summit (June 3-5, Toronto), which will be looking at “Converging networks: a foundation for innovation leadership.” Registrations are now open, in case you want to use up some 2018 budget and save money at the same time. I hope to see you there.

Most importantly, and I mean this with complete sincerity to all my colleagues (even those of you who disagree with me), I hope you and your families have a happy, healthy, safe and peaceful holiday season. I look forward to engaging with you in the New Year.

Earlier this week, Cartt.ca wrote “All I want for Christmas is a telecommunications price comparison report.” Over the next couple of weeks before the Christmas holidays, we expect to see 3 indicators of communications services pricing: the CRTC’s Telecommunications Monitoring Report, the OECD’s Digital Economy Outlook Data and ISED’s annual international pricing benchmark study.

As such, it is especially timely to see a report released this morning by the School of Public Policy at the University of Calgary, entitled “The Economics of Telecommunications in Canada: a backgrounder.” The report, by authors G. Kent Fellows and Mukesh Khanal, “examines the role of the telecommunications sector in Canada’s economy, including the role of investment in the sector, related labour statistics, how the telecom sector supports the activities of other sectors and the services telecom provides directly to individual households.”

The report sets important context for the pricing studies that will be released over the next two weeks, observing that, while expenditures on telecom services exceeds $50B annually, the underlying value to consumers is significantly higher than that. Further, the telecom sector is among the top 5 sectors for investing in its infrastructure, responsible for 5% of private sector industrial capital expenditures in Canada. 

When it comes to the very things that policy-makers do seem more likely to show interest in, namely the prices, service and value that telecom companies provide to Canadian households, there in fact seems far less cause for concern. Consumers continue to find significant value in the internet and mobile services they are buying and are increasingly choosing higher quality services that involve higher costs and prices.

…

In summary, the services that the telecom sector provides are not only important for Canadian households, but are also critical for every other Canadian industry. One often overlooked fact is that virtually every other Canadian sector employs a significant value of telecom products as an input, thus making telecom a critical keystone of the Canadian economy.

The service providers are investing in upgrading technologies, delivering faster networks and services, and Canadian consumers are making the choice to buy those higher priced services.

As the report notes, telecommunications services are not only important for Canadian households, but are also critical for every other Canadian industry. “One often overlooked fact is that virtually every other Canadian sector employs a significant value of telecom products as an input, thus making telecom a critical keystone of the Canadian economy.”

The Wire Report says seven consumer groups have now decided not to participate in the CRTC’s Telecom Notice of Consultation 2018-422 “Call for comments – Proceeding to establish a mandatory code for Internet services” [the Internet Code], blaming a lack of time and resources to participate effectively.

Joining the Public Interest Advocacy Centre (PIAC) are:

• Open Media;
• Consumers Association of Canada (CAC);
• Consumers Association of Canada – Manitoba (CAC-Manitoba);
• Ageing + Communication + Technologies (ACT);
• Canadian Internet Policy and Public Interest Clinic (CIPPIC);
• Canada’s Forum for Research and Policy in Communications (FRPC);

The actions follow the CRTC rejecting a request by PIAC for an extension to the December 19 deadline for initial comments.

Within a day of the original request for an extension, FRPC was able to pull together a 6-page letter supporting the PIAC application, complete with 22 footnotes. CAC-Manitoba provided a 2-page letter of support. I was unable to find any letters to the CRTC from the other organizations requesting extensions of the deadlines or providing support for the PIAC request.

The groups had time to announce to the media they would not be participating, but many of the groups failed to send a note to the CRTC supporting PIAC’s original request for an extension. In its letter turning down PIAC’s request, the CRTC said “the Commission is not convinced that the current schedule, which allows 40 days before initial submissions are due, does not provide sufficient time for all parties to make their initial comments.” Had these groups actually taken a few minutes to write a letter a support for the PIAC application, indicating their specific resource difficulties, perhaps the Commission might have reached a different conclusion. Interestingly, in the same procedural letter sent to PIAC, the CRTC approved a request for an extension for the Canadian Association of the Deaf, stating CAD “has demonstrated that it requires a party-specific adjustment to the deadlines set out in the Notice”.

Now, I might have argued that the CRTC consultation is premature, given that the Commission has not yet made a determination on its TNC 2017-450, a proceeding that will identify what companies need to register as internet service providers. As such, we don’t yet know if “private Wi-Fi connections, such as those in coffee shops, in airports, on public transportation, and in shopping malls” are considered to be internet service providers. That consultation has been closed for a year without a decision. So, there may be large groups of companies that will need to register with the CRTC as service providers, but these companies have no idea that there is a regulatory code of conduct being developed without their participation.

The Internet Code notice of consultation itself has a description of Internet service that ignores transient connections: “Internet access services can be categorized as either fixed services (Internet services) or mobile wireless data services (mobile wireless services).” Yet consumers often are asked to pay for other internet access services, such as in venues like hotels and airports and convention centres. Shouldn’t users of these relatively high priced services be able to avail themselves of the same consumer protection codes?

The notice of consultation cites the Policy Direction, saying “When the Commission implements non-economic regulatory measures (such as industry codes or participation in the CCTS), the Policy Direction requires the Commission to implement these measures in as symmetrical and competitively neutral a manner as possible.” Data from the Commission for Complaints for Telecom-television Services (CCTS) indicates that a disproportionately large number of complaints are generated by some of the smaller service providers, yet the preliminary view of the Commission is for the Code to apply only to large service providers (Bell; Cogeco; Eastlink; Northwestel; Rogers; SaskTel; Shaw; TELUS; Videotron; and Xplornet).

The CRTC notice created a template for participation, with 19 questions referencing a 17 page “Internet Code Working Document.” There were other options available to these groups. Remember, these organizations typically have applied for cost awards to cover participation in CRTC proceedings. Outside legal counsel, students and consultants could have been engaged to augment groups’ internal resources for preparing filings. I would have liked to see the groups work together (as many have so frequently in the past) to prepare initial submissions to meet the initial December 19 deadline in accordance with the timelines, and provide additional clarifications in the reply due at the end of January.

By ‘boycotting’ the CRTC process, these groups aren’t standing up in the interests of consumers. They failed to make their case for an extension to the CRTC and now, they are failing their constituents.

The new registration system is now up and running for The 2019 Canadian Telecom Summit, taking place June 3-5, 2019 in Toronto.

Now in its 18th year, The Canadian Telecom Summit is Canada’s leading ICT event, attracting the most influential people who shape the future direction of communications and information technology in Canada.

For 3 full days, The Canadian Telecom Summit delivers thought-provoking presentations from the thought leaders of the industry. If your interests are in the Telecommunications, IT or Broadcasting sectors, you need to attend The 2019 Canadian Telecom Summit.

The Canadian Telecom Summit is pleased to announce that we have entered into a partnership with Macgregor Communications to program the 2019 and 2020 events. Macgregor Communications produces world class conferences, tradeshows, and digital media. Michael Sone and I will be working closely working with Richard Jirka of Macgregor Communications to produce The 2019 Canadian Telecom Summit.

Early bird rates are now in effect through the end of February. Save more than $200 by reserving your place now. For more information, contact Richard or me.

Join us June 3-5, 2019 for The 2019 Canadian Telecom Summit.

Last week, the Auditor General of Canada released a report on “Connectivity in Rural and Remote Areas” that concluded, among other things, that the government “did not implement its Connect to Innovate program for broadband improvement in a way that ensured the maximum broadband expansion for the public money spent.”

So I found it interesting that in the same week, we learned the CRTC will be adding 60 people, at an annual cost of $10M, just to manage its new $150M per year broadband fund.

Recall, when the CRTC release its Decision 2018-377: Development of the Commission’s Broadband Fund, the CRTC concluded “The Commission acknowledges that the use of its own expertise, staff, and institutional capability for the implementation and operation of the selection process, as well as the monitoring and enforcement of the conditions of funding, would be efficient, cost-effective, and timely.”

Before reaching its conclusion, the CRTC acknowledged “Many parties… suggested either assigning ISED as the project manager or leveraging ISED’s expertise through collaboration between ISED and the Commission. These parties argued that leveraging the Commission’s and/or ISED’s resources would be efficient, avoid duplication and unnecessary delays, and result in more money being available to fund broadband projects.”

Sixty new people, at a cost of $10M per year, to implement the Broadband Fund. Remember, this is what the CRTC says is the “efficient, cost-effective” approach.

Yet another regulatory cost that ultimately drives higher consumer prices.