A few weeks ago, Bell released a new report, Navigating the Generative AI and Cybersecurity Journey [pdf, 580KB]. The study, prepared with Maru Research, surveyed a diverse group of 600 business leaders, information technology (IT) and security professionals from medium and large-scale enterprises representing a wide cross-section of industries.

The report looks at how organizations have adopted Generative AI (GenAI) in their workplaces, as well as where the technology has been found to be most beneficial.

Among the highlighted findings:

• About 60% of Canadian organizations that have adopted AI, have limited to no AI strategy in place to guide deployment, risks and expected value.
• Reducing and automating tasks is the top GenAI use case amongst Canadian businesses, followed by drafting and editing documents.
• Improved quality of product (54%) and a decreased time to market (52%) have been cited as key return on investment areas for early GenAI adopters.

Bell found 71% of professionals at medium to large enterprises are using GenAI to some degree; and, 41% are using it on a regular basis, with tools like ChatGPT making the use of AI especially accessible.

While GenAI is revolutionizing workplaces, organizations are being prudent about the risks. Among early adopters, the study heard about cybersecurity concerns. A third of the organizations are anxious about bad actors tampering with their AI systems; a quarter worry about theft of sensitive data; and, about 10% expressed concern about bad actors manipulating inputs into their systems.

IT and security professionals were found to be focused on proactively mitigating the security, legal and reputational risks that GenAI may present before fully adopting. About three quarters said that concerns about potential risks slowed the adoption of GenAI fairly significantly, while other organizations have moved ahead by implementing safeguards.

A few months ago, I wrote about concerns that Canada’s Artificial Intelligence and Data Act (AIDA) could limit adoption of innovative technologies. There is currently a Code, the Voluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems.

While some industries are still exploring the best use for GenAI, retail was found to be leading in adopting the technology for production use, including customer-facing applications and inventory management.

There is optimism reflected in the report.

Despite the challenges, many Canadian organizations are optimistic about the future of AI – almost half expect we are just at the beginning of AI model progress and much more progress will take place over the next five years. Looking at how AI adoption influences this sentiment, early adopters expect moderate advancements over the next five years, while mainstream businesses anticipate even more significant breakthroughs. The consensus is clear: generative AI is just getting started and its role in reshaping Canadian industries will continue to expand.

My key take-aways from the report? The best outcomes for adopting GenAI in the workplace will be achieved by organizations placing a priority on governance, deploying multi-dimensional approaches to security risks, and improving threat detection using AI to manage those risks.

A new report looks at technology adoption and affordability through analysis of recent Statistics Canada data. I promised a look at this report in my recent post on rural broadband solutions.

Communic@tions Management Inc. (CMI) published “Technology adoption, use, and affordability in Canada” [pdf, 1.1 MB], documenting key indicators for how Canadians relate to the internet and smartphones. Through the years, CMI has developed an expertise in analyzing and interpreting Statistics Canada publications, in addition to developing custom tabulations and correlations of the raw Statistics Canada data.

CMI estimates that in 2023, 95% of Canadian households had home internet connections, and 90% of households had smartphones. An additional 5% of households had mobile devices that were not smartphones, for total mobile adoption rate of 95%.

CMI notes that in 2021, more than half of Canadian households now rely exclusively on cell phones for their phone service – a notable milestone.

CMI took a look at spending by income quintile (similar to what I have done in the past) and added in a comparison to spending by income quintile in the US. “Across most income groups, Canadian households spend less on cellular service than do Americans.”

While we know that the mobile phone has become a substitute for wireline phone service, CMI says “it is not unreasonable to state that the smartphone has substitution effects for landlines, photographic services, newspapers, and magazines and periodicals.” Looking at other data from the 2021 Survey on Household Spending, CMI found the following changes in average household spending on each of these items from 2010 to 2021:

• Landline telephone services -56.4%
• Photographic services -42.8%
• Newspapers -27.3%
• Magazines and periodicals -50.0%

During that period, the number and percentage of households with cell phones was increasing – from 78.1% of households in 2010 to 93.9% in 2021. And, within those totals, an increasing number of devices were smartphones.

CMI also notes that the Survey of Household Spending estimated there were 13,297,000 households, of which 10,378,000 had cell phones. Using Statistics Canada data, CMI estimated there were at least 17,772,000 cell phones in use at that time. By 2021, 14,197,000 out of Canada’s 15,123,000 households had at least 26,759,000 mobile phones. “In other words, from 2010 to 2021, the number of total households went up 13.7 per cent; the number of households with cell phones went up 36.8 per cent; and the number of cell phones in those households went up 50.6 per cent.”

Using data from custom tabulations of Statistics Canada’s General Social Survey, CMI found that smartphone owners were almost twice as likely to read news online daily, compared to those that do not own smartphones; and smartphone owners were less than half as likely to read a print copy of a newspaper daily, compared to those that do not own smartphones.

To examine affordability, CMI turned to Statistics Canada’s 2022 Canadian Internet Use Survey (CIUS). As seen in the figure, “home Internet is nearly ubiquitous for Canadians, and “no need or interest” is the most important reason for non-adoption.”

Adoption varies by age, ranging from 99.3% in the age group 15-24; 98.8% for ages 25-34; 98.0% for ages 35-44; 96.7% for ages 45-54; 93.1% for ages 55-64 and 83.7% for those 65 and older. In each segment, “No need or no interest” was the dominant reason for non-adoption, beating out “the cost of equipment” and “the cost of the service”. CMI stated “In other words, there is much more likely a demographic link based on age than an affordability link based on income.” Similar results were found for smartphone adoption.

There are clear policy implications that arise from CMI’s work. As CMI says,

Thus, one might say that the adoption of Internet and smartphone technology in Canada is nearly ubiquitous, with age and attitudes a much greater factor than affordability when influencing non-adoption.

To the extent it is a goal of public policy to maximize adoption – and use – of these technologies, targeted solutions, including measures to improve digital literacy and skills, especially among older adults, would appear to be more logical and efficient than broader, more disruptive, industry structural changes.

It is worth emphasizing that sentence: “Targeted solutions, including measures to improve digital literacy and skills, especially among older adults, would appear to be more logical and efficient than broader, more disruptive, industry structural changes.” This resonates with themes you have seen before on these pages.

The distillation of data in the report is worth keeping in mind as we turn our minds toward 2025 plans and objectives. Targeted solutions will be an approach for policy strategists to keep in mind when developing platforms for the 2025 election.

The full report is a worthwhile read.

Most of us take network reliability for granted. We expect our devices to be connected wherever we are. We expect calls to get through, emails to clear the outbox, direct messages to be received.

In a survey of US mobile consumers, Opensignal reports that reliability ranks second only to cost when deciding on a wireless carrier. Network reliability is considered twice as important as data transmission speed.

And indeed, most of the time, the networks work.

Still, we have all had the frustration of entering a dead zone, or experiencing a networks failure. Canadian carriers are investing billions of dollars each year improving coverage and extending network reach. As reported by PwC [pdf, 5.5MB], Canadian mobile carriers are reinvesting 17.9¢ of every dollar of revenue, a capital intensity 23% higher than that of the US (14.6¢) and upwards of 50% more than Australia (11.6¢).

Earlier this year, I wrote about network resilience. In that post, I referred to a White Paper by Dr. Georg Serentschy, the former head of the Austrian telecom regulator and past chair of BEREC (Body of European Regulators for Electronic Communication). That paper included a recommendation calling for the establishment of a central coordinating body as “an important step towards overcoming the usual historically fragmented governance structures.”

A few weeks ago, I took a somewhat critical look at the CRTC’s recently released strategic plan. A year ago, the CRTC’s action plan included a bullet point to “Work with government partners to improve the reliability of Canada’s networks, including access to emergency services”. No comparable activity is listed in this year’s plan. The closest is an action calling for “issuing a decision to help improve the reliability, affordability, and competitiveness of telecommunications services in the Far North.”

To me, that doesn’t go far enough.

More than a year ago, the file closed for the CRTC’s consultation on “Development of a regulatory framework to improve network reliability and resiliency”. We still have not seen the outcome of that consultation.

Innovation, Science and Economic Development Canada released “A Telecommunications Reliability Agenda” last year, with “three pillars at its core”:

• Robust Networks and Systems
• Strengthening Accountability
• Coordinated Planning and Preparedness

As Dr. Serentschy writes, “governments cannot tackle these challenges alone, nor can industry.”

When we are accustomed to always-on, high quality communications services, it is easy to become complacent with the concepts of network reliability and resilience. The topic should remain a focus for carriers, regulators, and agencies at all levels of government.

Last week, my post included a discussion of what can happen to capital resources when network operators find an inhospitable telecom policy environment.

Building effective network resilience requires a regulatory and policy framework that actively promotes network investment. Consider the resultant improvement in network reliability to be an intangible public dividend.

A couple of weeks ago, I saw two articles by academics writing in the Hill Times, each looking at rural broadband solutions. Each presented a different perspective.

In “Tackling the ‘wicked’ rural broadband gap”, by Professor Gregory Taylor of University of Calgary, the subtitle says: “Policymakers must resist the temptation to throw up their arms in frustration, or—worse—leave the entire problem to the whims of Elon Musk.”

“Towards a new Canadian broadband future?” was written by Professor Erik Bohlin, the Ivey Chair in Telecommunication Economics, Policy, and Regulation at Ivey Business School at Western University. The subtitle on his article reads “We will need to face the reality that the fundamental competition now is not primarily between the telecom carriers, but with other value systems.”

Professor Bohlin writes about “Canada’s lagging productivity and weak investment climate, especially around broadband infrastructure, which provides a foundation for a thriving digital economy… Long-standing gaps with the United States in both labour productivity, and information and communications technology investments have been identified by the Organisation for Economic Co-operation and Development”

In the past two months, we have seen two major corporate transactions among Canadian telecom operators. Bell announced a $5B acquisition of US-based Ziply Fiber. adding 1.3M addresses to its fibre footprint. Rogers invested $4.7B to take majority control of Maple Leaf Sports and Entertainment. Each deal represents investment in businesses that are independent of Canada’s telecom policy framework.

Earlier this month, the UK moved closer to approving the merger of mobile operators, Three and Vodafone. The Competition and Markets Authority set out a remedy package that would permit the deal to go through, taking the UK down to 3 carriers in a market with 93 million mobile subscribers in a land area a quarter the size of Ontario.

My immediate reaction to the Bell transaction was that this is another indictment of Canada’s telecom regulatory and policy framework. I wasn’t alone with this line of thinking. TD Securities wrote “Having some diversification into the U.S. could be useful if Canadian market conditions do not improve, and we like the flexibility to allocate less capex to Canada and more to the U.S. if future government/regulatory policies do not reward investment in Canada.”

Professor Bohlin points to the CRTC’s mandated wholesale access to fibre networks as “pivotal for investment incentives.” He notes that for 25 years, the European Union “followed a primary emphasis on mandated access in telecoms, and has lower rates.” The EU identified a telecom investment gap in the order of 200-billion euros required to achieve connectivity targets for 2030. An EU white paper [pdf, 555KB] calls for an increased focus on investment incentives for advanced communications infrastructure.

Incentives to invest is a common theme on this blog. Professor Bohlin calls for “increased dialogue between industry and government about the fundamental objectives for developing a strong, viable Canada, and the enabling role that telecom infrastructure may play in achieving that vision”.

I read the Taylor piece with a more critical eye, given that he erroneously states “most telephone service of the 20th century was provided by public provincial, and, in some cases, municipal services — MTS, SaskTel, Alberta Government Telephones, Edmonton Telephone, and BC Tel — which had to step in when the private sector came up short.” (One of those companies – BC Tel – is not like the others.)

Professor Taylor’s article complains about the number of rural Canadians who still lack access to broadband services that meet the CRTC’s national objective.

It has been eight years since the CRTC made the bold 2016 objective that “Canadians in urban, rural, and remote areas can access affordable, high-quality telecommunications services,” and set 50 megabits per second (Mbps) download and 10 Mbps upload as the ambitious targets to qualify as the required speeds. That audacious goal doubled the 2015 Federal Communications Commission (FCC) target when the American regulator set benchmark speeds at 25/3 Mbps. However, this once-bold policy stand is starting to look increasingly timid in 2024. In its recent 2024 Broadband Deployment Report, the FCC raised its fixed speed benchmark for broadband to 100 Mbps download and 20 Mbps upload.

I have written before that when some Canadians are wanting for any kind of affordable broadband, it takes a measure of arrogance to proclaim that 50 Mbps isn’t good enough.

The latest CRTC’s data is nearly two years old. At year-end 2022, 93.1% of Canadians had access to broadband exceeding the objective. That blended average is composed of 99.4% urban and 67.4% rural. So the focus on rural connectivity is understandable. Still, it is unclear why Professor Taylor used even older 2021 data in his article, saying that only 62% of rural households had access to the broadband objective. We can see a significant improvement was made between 2021 and 2022, growing from 62% to 67.4%. More work needs to be done, but 5.4% represents more than 350,000 people, a substantial achievement.

In the coming weeks, I am working on a post that takes an in-depth look at technology adoption and affordability. Watch for it on these pages

Professor Taylor’s article concludes with a reference to wholesale access to fibre networks, somehow seeing increased competition as a regulatory initiative promoting investment. The CRTC itself recognizes the deleterious impact of mandated access on investment incentives and its decisions attempt to mitigate those concerns.

A few years ago, I wrote “Isn’t some broadband better than nothing?”. For people without access, the best rural broadband solutions are the ones that can be delivered now. Three years ago, I wrote, “Le mieux est le mortel ennemi du bien.”

In developing rural broadband expansion, it is impractical to restrict solutions to universal fibre access. It is better to get some broadband service to unserved areas rather than wait for so-called future-proof connectivity.

We can’t wait for a perfect solution for broadband for all Canadians. But we can strive to do a lot more, a lot better, and a lot sooner.

That means improving the conditions that promote investment in advanced digital infrastructure.

Last night’s Cabinet directive on the CRTC’s wholesale fibre decision (2023-358) may show signs of tangled up regulatory processes.

Ted Woodhead has a good review of the issues that were under review and the likely resolution. As an aside, if you don’t already subscribe to his blog, you should.

As Ted writes,

In an after hours announcement Minister Champagne directed the CRTC to reconsider its earlier decision to mandate High Speed Access resale allowing the large incumbents Bell, Rogers and Telus to resell each others’ FTTH services in Ontario and Quebec.

Of course the Minister couldn’t just say that, he first had to deny the Bell Petition that would have rescinded the wholesale decision altogether or vary it on his motion. Rather than do that himself, the Minister referred it back to the CRTC to *ahem* reconsider.

Ted’s blog post discusses the issues motivating the review, so I won’t get into that aspect of the Cabinet determination.

I want to focus on the process. Why couldn’t the Minister make the changes that are implicit in Minister Champagne’s statement and the Order by the Governor-in-Council itself?

The answer may be found in certain government processes that create challenges under the timelines set out in the Telecom Act. I have written before about the various channels of appeals of a CRTC decision. In this particular case, Bell appealed to Cabinet, which engaged the timelines set out in Section 12(1) of the Act.

12(1) Within one year after a decision by the Commission, the Governor in Council may, on petition in writing presented to the Governor in Council within ninety days after the decision, or on the Governor in Council’s own motion, by order, vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.

Unpacking that complicated sentence, this means that you have 90 days to file an appeal (a written “petition”) following a CRTC decision you don’t like. If Cabinet wants to act, it has until one year after the CRTC decision to make changes to the decision (“vary”), rescind the decision, or refer it back to the Commission for them to do the dirty work. Note that Cabinet can act on its “own motion”, meaning that it doesn’t need to wait for a “petition” to come it. Cabinet can also simply allow the calendar to run out and do nothing.

Let’s look at the timetable for last night’s Cabinet Order. The CRTC issued Telecom Decision CRTC 2023-358 on November 6, 2023. As stated in the Order, Bell filed its petition on February 2, 2024 (88 days after the Decision). Cabinet released its Order on November 6, 2024, exactly one year after the Decision.

The language of the Order implicitly tells the CRTC the expected outcome from its “reconsideration”. So why didn’t Cabinet use its powers to vary the Decision itself? After all, the CRTC already has such a jammed up schedule that its strategic plan calls for “addressing backlogs”.

Could it be that the Treasury Board’s regulatory impact analysis requirements have created so much red tape that Cabinet cannot complete the required impact analysis and still conform to the one-year review deadline set out in the Telecom Act?

As a result, asking the CRTC to “reconsider” allows Cabinet to bypass the impact process, but its add more work to a Commission already tangled up with its own work schedule.

It is also worth noting that the CRTC’s decision from last year (2023-358) has been superseded by the CRTC’s release a couple weeks ago of rates for the broader competition policy framework set out in August.

Last night’s Order in Council includes an explicit reference to the August decision, but it does not reference the CRTC’s October 25 interim rates order. At paragraph 9, doesn’t that CRTC order explicitly address the competitive and investment issues contained in the Cabinet reconsideration directive?

9. The interim rates will allow competitors to better serve Canadians using the latest available technology. The rates will provide competitors with the opportunity to innovate and to attract customers by selling a range of communications services over FTTP, including Internet, television, home phone, and smart home solutions. The rates will also ensure that those who build Internet networks will continue to invest in high-quality Internet access across Canada.

Will the CRTC respond to the Cabinet reconsideration with finalizing the interim rates set in October, or will more substantive changes be made?

The clock is ticking on the CRTC’s August 13, “Competition in Canada’s Internet service markets” framework. If a petition to Cabinet is going to be filed, the 90-day deadline is coming up early next week.

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(Today’s blog post title is a nod to Bob Dylan’s Tangled Up in Blue, with apologies)