To what extent has the regulatory world been influenced by our choice of jargon and terminology?

Our choice of words, our use of language is often geared toward influencing opinion. But to what extent have we seen regulators influenced by terminology that is non-neutral or even pejorative?

I was reading an article by Eric Fruits of the International Center for Law and Economics that drew my attention to this issue. “The Curious Case of the Missing Data Caps Investigation”, is a recent about the FCC’s lack of action on the use of “data caps.” The author notes that what the FCC calls “data caps” aren’t really caps at all. Professor Daniel Lyons, associate dean of academic affairs and a professor of law at Boston College Law School, notes:

the phrase “data caps” is a misnomer. A cap implies a hard limit on the amount of data a customer may consume each month. That’s not an accurate description of most UBP [usage based pricing] offers, which are perhaps better characterized as pay-as-you-go plans. Customers pay in advance for a certain amount of data, and if they exceed that amount, they can purchase an additional amount. In other words, customers on these plans have unlimited data—they just pay for what they consume, just as they do with most other goods in society.

Me? I have long prefered the term “usage tier” for that very reason. As I wrote in 2016, such tiers enable lower-priced options for consumers who don’t need (or don’t want to pay) for a higher priced unlimited plan. Usage tiers have proven to be very popular in mobile services.
The recent article demonstrates that neither consumers nor service providers want true data caps. “Not only are hard caps subjectively ‘bad’ for consumers, but they are also bad business, because they leave money on the table. There’s no need to ban hard caps, because the market has already banned them. Consumers don’t want hard caps and providers don’t want to impose them.”

Over the years, jargon and terminology have changed in regulatory proceedings. Non-facility based service providers have found the term “reseller” to be a pejorative term. Back in the olden days, the resale and sharing of telecommunications services was a hard fought regulatory battle (you’re welcome). Even for small pieces of telecom facilities that were combined with other components and billions of dollars of infrastructure, service providers recognized that resale was resale. Resale was governed by wholesale regulations and tariffs approved by the CRTC or negotiated with the underlying carrier. To this day, the terms “reseller” and “wholesale-based” appear in official regulatory filings in a somewhat passive aggressive manner.

There are many other examples of jargon and terminology used in a manner to elicit negative feelings. Are early termination fees (ETF) a form of “junk fee”? Some argue that an ETF is a quid pro quo: the consumer pays a lower monthly price in exchange for a contractural promise to keep purchasing over a specified time period. The ETF is the cost of breaking that contract. While such fees are normal in mortgages, in insurance, hotel bookings and countless other industries, in telecommunications we have effectively eliminated the ETF.

The elimination of early termination fees was an effort to lower the cost for consumers to switch service providers prior to the end of a contract. Has there been any research to test the effectiveness of this regulatory measure or its impact on prices?

What other telecom terminology and jargon do you find being used in a not so neutral manner?

The Globe and Mail ran a story today that confused cellphone prices with mobile bills.

Prices aren’t the same as bills. I first wrote about that precisely 9 years ago.

The print edition headline was “Statscan figures on falling phone bills clash with other data”. The online headline was “Statscan says cellphone bills are plunging – the truth is more complicated”.

The story lede reads, “As households struggle with the largest bout of inflation in four decades, Statistics Canada says consumers are getting some relief from what is often a source of frustration: cellphone bills.”

The problem? Statistics Canada doesn’t say “cellphone bills are plunging”. The story is about the mobile services component of the consumer price index (CPI), not your cellphone bill. There is an important distinction. Consumers’ total monthly bills are measured in a different Statistics Canada report, the Survey of Household Spending, which is conducted annually (at best).

But, aren’t bills the same as prices? No, they aren’t.

Let’s say you are looking at renting an apartment. A building has a 1000 square foot 1-bedroom unit on the fourth floor available for $1500 per month, and the building has a 2 bedroom penthouse unit on the 30th floor with 360 degree views of the city for $2500 per month. You choose the 1-bedroom. A year later, the landlord has started including bundling heat into the rent, and you learn that the penthouse is now available for $2000 per month. You decide to upgrade. Your monthly rent bill went up but prices clearly came down.

In the mobile world, there are lots of elements that make up the total bill. Do you have limited or unlimited calling? Nationwide or regional? US calling? Reduced international calling? How much full speed data is included? Do you have limits on text or multi-media messaging? What voice mail features do you have? Those kinds of factors are described in the Globe and Mail article as quality adjustments.

The apartment case is obviously a hypothetical, since rents in Canada have been going up. Indeed, one of the only components of the CPI that has been showing regular decreases has been the Communications Services component, especially the mobile services sub-component (as I wrote about last month here and here).

The Globe story quotes National Bank Financial analyst Adam Shine saying “All or nearly every Canadian could have found a better-priced plan in 2023”.

Personally, I have talked with my carrier twice in the past 12 months to discuss my own mobile plans. I cut my monthly plan price by 43%, and I now get more than 5 times the data and cross-border roaming. I helped a close friend lower her bills more modestly just before taking a week-long vacation to the US. She had 3 lines with 10-32GB of data; now they share 450GB and they have US and Mexico borderless service. Per line she is now paying 10% less. They migrated from a flanker onto the main brand. And, they are getting far more for less money, while incurring no roaming fees on their vacation this week.

“Statscan says cellphone prices are plunging – and they are.” There, I fixed the Globe’s headline

Businesses are in business and are supposed to make money. Milton Friedman’s 1970 article in the New York Times, said it succinctly in its title, “The Social Responsibility of Business Is to Increase Its Profits”.

Businesses do not set out to be non-profits. One might even say that profit – making money – is the primary purpose for any business. In a Harvard Business Review article about the Friedman doctrine, Justin Fox wrote “You might disagree with Milton Friedman’s famous claim that the sole social responsibility of business is to increase its profits. But you can’t deny that it sounds simple and straightforward.”

In the opening segment of a podcast on The Hub, Rudyard Griffiths and Sean Speer discussed “the bizarre reaction from commentators and politicians” to Bell Canada’s recent financial results, “and what it signals about Canada’s policy-making mindset when it comes to big business.”

[Rudyard Griffiths] The key thing here that drove this steep cut by Bell to defend their free cash flow, to defend their dividend, to defend their share price, to defend their ability to access capital, to finance the infrastructure investments they need to make, all goes back to that CRTC decision to allow their competitors onto their fibre networks in Ontario and Quebec, but did not require Bell’s competitors in Western Canada to do the same. This decision effectively, like semi-nationalized these fibre networks on the part of Bell. And you can say ‘That’s great. It will lead to lower prices for fibre in Ontario and Quebec.” OK. It also led to 4,000 job losses and an increasingly difficult situation for Bell to create the free cash flow that it needs to operate as a high dividend yielding business, which is its value-proposition to investors, who give it capital in the first place to do all the things that the government wants it to do.

An open letter from Bell’s CEO described the challenges associated with the transformation of the company.

At Bell Canada every year we can expect to lose over $250 million in legacy phone revenues. At Bell Media, our advertising revenues declined by $140 million in 2023 compared to 2022. Across Bell Media’s news operations, we continue to incur over $40 million in annual operating losses despite having the most-watched network of local TV stations.

Financial illiteracy can be the only explanation for politicians of all stripes drawing a parallel between the $40M annual operating losses at the news operations and $40M in regulatory relief provided to Bell Media.

In the National Post, Terence Corcoran writes, “It’s a toss-up as to which of the two — Liberal Prime Minister Justin Trudeau or British Columbia’s NDP Premier David Eby — deserves top billing as the economic and political ignoramus of the month.”

For some reason, the concept of profit seems to have escaped the leaders understanding of business. The opportunity to make a profit is how investors are attracted to a segment. That is how businesses grow, invest in infrastructure, hire people, pay taxes, contribute to the country’s overall economic well-being.

More than a dozen years ago, I asked why profit is dirty word. Canadians need to get over that hang up. We need to celebrate entrepreneurs and investors that want to make money.

Businesses are in business. In business to make money. That’s a good thing.

A couple months ago, I reminded readers that I generally don’t like technology specific legislation.

With reference to the concerns about online harms, I wrote “it is reasonable to expect that content that is considered illegal in print media should continue to be considered illegal in digital form.”

A recent article from ITIF discusses explicit AI-generated images. The sharing of non-consensual intimate deep-fakes of Taylor Swift is sparking calls for new legislation to deal with images generated by artificial intelligence (AI).

ITIF argues that the heart of the issue predates AI, and indeed can be traced to before the internet era. The underlying issue in this instance is image-based abuse – sharing (or threatening to share), nude or sexual images about another person without consent. Consider Playboy’s publication of Marilyn Monroe nudes, or Hustler publishing Jacqueline Kennedy Onassis.

What has changed in the internet age is ease of becoming a global distributor. AI has simplified ‘photo-shop’ processing to generate fake images (and videos) with relative ease.

The root problem, independent of technology, is non-consensual sharing of intimate images, which is treated inconsistently by various jurisdictions within the United States.

In Canada, Section 162.1 of the Criminal Code deals with this.

162.1 (1) Everyone who knowingly publishes, distributes, transmits, sells, makes available or advertises an intimate image of a person knowing that the person depicted in the image did not give their consent to that conduct, or being reckless as to whether or not that person gave their consent to that conduct, is guilty

1. of an indictable offence and liable to imprisonment for a term of not more than five years; or
2. of an offence punishable on summary conviction.

An article last week by former CRTC vice-chair Peter Menzies suggests that a tweak to that Section may provide greater clarity to the phrase “person depicted” in the Criminal Code.

ITIF notes, “Unfortunately, given widespread fears about AI and backlash against the tech industry, some critics are quick to point the finger at AI.” It is important to note that usage policies for OpenAI (the group behind ChatGPT) already prohibits “Impersonating another individual or organization without consent or legal right” and “Sexually explicit or suggestive content.”

ITIF argues “unless policymakers ban generative AI entirely, the underlying technology — which is publicly available to run on a personal computer — will always be around for bad actors to misuse.” Google and Meta have created tools for users to report unauthorized intimate images.

ITIF suggests that those who distribute nonconsensual intimate images should face significant civil and criminal liability, but these should not be based on technology-specific legislation targeting AI. Legislative solutions need to focus on stopping perpetrators of revenge porn, independent of the technology used for generating or distributing it.

This past Thursday, the FCC adopted a Declaratory Ruling [pdf, 155 KB] that makes it illegal to use voice cloning technology in robocall scams targeting consumers. As the FCC notes, State Attorneys General can already target the outcome of an unwanted AI-voice generated robocall. The scam or fraud can be prosecuted. The major change from the FCC last week makes the act of placing a robocall with an AI-generated voice illegal without having to go after the scam. The FCC’s ruling expands “the legal avenues through which state law enforcement agencies can hold these perpetrators accountable under the law.”

Last month, fake robocalls encouraged voters to skip participating in the New Hampshire primary.

Technology specific legislation for AI? Your thoughts are welcomed.

Could government online safety legislation make it less safe to be online?

The mandate letter for Canada’s Minister of Canadian Heritage includes a section calling for online safety legislation. The challenge is how to do this within a democratic framework. The Heritage website says:

The Government of Canada is committed to putting in place a transparent and accountable regulatory framework for online safety in Canada. Now, more than ever, online services must be held responsible for addressing harmful content on their platforms and creating a safe online space that protects all Canadians.

There is a lot captured in those two sentences.

It sounds good if you say it quickly, but challenges arise when you pause to think about each clause. Putting in place a transparent and accountable regulatory framework? Holding online services responsible for the harmful content on their platforms? Holding the services responsible for creating safe online spaces?

Sri Lanka recently passed an Online Safety Bill [pdf, 130 KB] that has created concerns among civil liberties groups and the US government.

The Sri Lanka bill creates a 5-person Online Safety Commission with the powers and functions (among others):

1. to issue directives to persons, service providers or internet intermediaries, who have published or communicated or whose service has been used to communicate any prohibited statement, requiring them to provide to persons who have been adversely affected by any prohibited statement, an opportunity of responding to such prohibited statement;
2. to issue notices to persons who communicate false statements that constitute offences under this Act, to stop the communication of such statements;
3. to issue directives to persons who communicate prohibited statements under this Act, to stop the communication of any such statements;
4. to issue notices to any internet access service providers or internet intermediary to disable access to an online location which contains a prohibited statement by the end users in Sri Lanka or to remove such prohibited statement from such online location;
5. to refer to the appropriate court for its consideration any communications that may be in contempt of court or prejudicial to the maintenance of the authority and impartiality of the judiciary, and to provide such assistance as may be required from any court in respect of any matter so referred to such court; and,
6. to make recommendations to service providers, internet intermediaries and internet access service providers to remove prohibited statements.

Canadians should be concerned about government over reach on freedoms of expression. [A veteran Member of Parliament introduced a private members bill this past Monday that limits “promotion” of fossil fuels.]

Canada held a public consultation in 2021. At the time, the summary observed that “respondents signaled the need to proceed with caution.”

Writing about the UK’s Online Safety Bill last April, the post explored whether government regulations might actually make it less safe to be online. Concerns with the UK bill included censorship powers over digital speech and content, and the creation of backdoors into encryption systems, which could then be exploited by malevolent actors.

The editor of Telecoms.com observed “Given the degree of technological and ethical illiteracy shown in the drafting of this bill and its passage through the House of Commons, there seems little hope that the Lords will understand what’s at stake.” Ottawa observers might ascribe similar levels of illiteracy to Canadian parliamentarians.

The UK Bill received Royal Assent late last year. Ofcom, the UK communications regulator, has started establishing regulations to enforce the new bill.

As Canada’s government resumes, will it move forward with online safety legislation? Do Canadians have sufficient trust in our government institutions to agree with moving forward?