Is there too much focus on broadband access and not enough emphasis on adoption?

That is an issue I have raised frequently over the years [as early as this post from 2007]. Canada enjoys nearly universal access to broadband, but one in six Canadian households still does not have a broadband connection.

TELUS raises this important point in its submission to the Governor in Council [pdf] in respect of Bell’s appeal of the Fibre to the Home resale requirements in the CRTC’s Wireline Wholesale Decision [see full file for the appeal here].

An entire section of the TELUS submission explores this issue. The section, entitled “Encouraging greater broadband access and adoption requires a broader toolbox than that available to the CRTC,” leads off stating, “the benefits of ultra-high speed Internet access and adoption encompass economic policy, health policy, environmental policy, and more. These policy issues require policy levers that are beyond the institutional wherewithal of the CRTC.”

The section talks about measures to promote adoption that should be the focus of government, requiring an evolution in the focus from a monopoly era regulatory focus on mandated access. “Canada is now benefitting from a level of platform competition (between cable, telephone company and wireless networks) that renders monopoly-era remedies like mandated access unnecessary and harmful.”

TELUS says “Broad public policy issues demand broad policy tools.” And while the marketplace has evolved, with most Canadian homes having broadband access offered by multiple wireline and wireless networks, TELUS says “The world has moved on, but the CRTC’s toolbox has not.” TELUS tells the Governor-in-Council that “a far more productive, positive, and impactful focus for government efforts” would be to address “the other digital divide,” such as the socioeconomic factors delaying broadband adoption. “The private sector can build networks. But government can help to ensure that more Canadians use those networks.”

To fully exploit the benefits of ultra-high speed Internet, there must not only be access but also adoption. It is one thing for people to be able to sign up with a provider; it is quite another for them to do so. And while platform competition will encourage innovation and investment, it cannot, on its own, encourage adoption. This is a key area for government support.

In its submission, TELUS describes how nationally, 97% of Canadian households have access to broadband, yet only 80% subscribe. In some regions the gap between access and adoption is more acute, such as Saskatchewan where 99% of households have broadband access, but only 72% subscribe.

TELUS encourages the government “to devote resources to increasing adoption”. It observes many “important programs and initiatives that are beyond the resources and scope of the CRTC, yet of critical importance to broadband adoption.”

The TELUS submission is worth a review by all of us who support enhancing Canada’s internet economy. With so many of the submissions setting out somewhat obvious, self-serving positions, it is refreshing to read one that steps back and lays out a broader digital vision for Canada.

I’d like to think increasing adoption of digital technology is a position we can all support.

It has been 10 years since Canada held its last comprehensive review of telecommunications policy. The final report [pdf] was delivered in March 2006 and it included a recommendation that such a review be held regularly – every 5 years.

In April 2005, the Telecommunications Review Panel was struck by the Liberal Minister of Industry, David Emerson “to review Canada’s telecommunications policy framework and make recommendations on how to modernize it to ensure that Canada has a strong, internationally competitive telecommunications industry that delivers world-class services for the economic and social benefit of all Canadians.” The panel delivered its recommendations in March 2006 to Conservative Industry Minister Maxime Bernier.

For a number of years, I have been indicating that a review is long overdue [such as here, here and here].

There is much to review in Canada’s legislation and in our regulatory institutions, as I have highlighted on this site.

As Canada approaches its sesquicentennial next year, Canada’s Minister of Innovation, Science and Economic Development, Navdeep Bains, should create a new expert panel with a similar mandate to the panel of a decade ago, “to ensure that Canada has a strong, internationally competitive telecommunications industry that delivers world-class services for the economic and social benefit of all Canadians.”

An article in the Globe and Mail over the holidays merits highlighting. “Southern Ontario should be an innovation cluster, not a farm team” was authored by Patrick Deane, Meric Gertler and Feridun Hamdullahpur, the president and vice-chancellor of McMaster University, the president of the University of Toronto and the president and vice-chancellor of the University of Waterloo respectively. In their article, the academic institutions’ leaders set out to describe a vision for a Southern Ontario innovation supercluster in the Toronto, Waterloo and Hamilton regions.

As they write, “Enabling higher rates of knowledge-intensive growth in an economy as diverse and complex as Southern Ontario’s requires a break from the status quo.”

So how do we realize this ecosystem’s full innovative potential, instead of continuing as a farm team? The right mix of investments and policies will spur us forward.

• Invest in organizations that drive local economic development and quality of life, from civically minded governance bodies to cultural institutions.
• Co-ordinate investments in research areas with both the highest success rates and strongest growth potential, from regenerative medicine to quantum science; from advanced materials to environmental technologies.
• Ensure that our immigration rules make us a destination of choice for high-potential individuals.
• Turn taxpayers into equity partners and give the public a share of the upside.
• Support firms that can scale up by connecting them to successful mentors, addressing gaps in our venture financing systems and leveraging public procurement strategically.
• Inculcate a culture of risk-taking that rewards rather than penalizes failure, that fosters adaptability and learning from mistakes.

Whoa! Are these folks serious? “Inculcate a culture of risk-taking that rewards rather than penalizes failure”. Tolerates failures, yes; accepts failures, yes; but, “rewards failures”? That sounds like our current system of government subsidies for failing aircraft industries (among others). Take taxes from successful companies and give handouts to failing companies.

“Turning taxpayers into equity partners” is an equally questionable approach. Governments typically do a notoriously bad job picking winners. Do we really think that crown corporations are the way to enable higher rates of knowledge-intensive growth?

Surely we can encourage risk-taking by tolerating failure without actually rewarding it. Our ultimate objective has to be building successful ventures. Our policies need to reward success, not failure. Do these universities give degrees to students who fail? My alma mater doesn’t.

The university presidents were correct that to enable a knowledge-intensive transition in Southern Ontario’s economy we need to break from the status quo. Unfortunately, their recommendations sound too much like more of the same old approach.

What caught your eyes this year?

Looking at the analytics, these 5 blog posts had the most individual page views:

1. “Beginning of the end” [September 22]
2. “Does CRTC policy inhibit investment?” [October 20]
3. “Fair, predictable, and transparent” [March 4]
4. “Competition in telecom: net neutrality and innovation” [March 27]
5. “Is Mobile TV broadcasting or telecom?” [February 21]

I have to add an honourable mention for “Changing the name of the game“, the piece I wrote December 16, just a couple of hours after the Shaw – WIND Mobile transaction was announced. It quickly rose to be one of the top viewed posts of the year, despite only being available for the last two weeks of the year.

Thank you for following and engaging over the past year.

As I wrote last week, let me extend to you the very best wishes for health, happiness and peace in the year ahead.

As I reflect on the past year, I see that I have again been less prolific in my writing on this blog. In 2014, I wrote 109 posts; this past year was just slightly fewer at 103, but these are both significantly lower than the 132 posts in 2013 and 139 in 2012. I am spending considerably more time on Twitter [follow me: @mark_goldberg] and, I am doing my best to spend much of each summer and more time focused on family.

My wish list for 2016 again includes seeking support for a national program to increase the adoption of computers and broadband in low income households with school-aged children. Our kids can’t compete with their classmates if they don’t have access to a connected computer at home. As I have written in the past, “almost half of all households in Canada’s lowest income quintile lack a home computer. Affordability is keeping a million households from digital connectivity.”

I continue to be optimistic that this is the last year that I beat that drum. I sense that others are recognizing the need for government and the private sector to work together to help bridge the homework gap and the affordability divide.

While I am setting objectives for next year, I guess I still wouldn’t mind losing 20 pounds, but I don’t mind having a bit of a soft landing spot for my grandson to rest when we take naps “watching the game” together on Sunday afternoons.

There is a traditional prayer for governments that seems appropriate to invoke as we approach 2016 with new leadership in Ottawa: “Teach them insights, that they may administer all affairs of state fairly, that peace and security, happiness and prosperity, justice and freedom may forever abide in our midst.”

I wish all of you the best in the year ahead. I look forward to continuing to engage with you and I hope that I will provoke you to explore some of the issues with a different perspective in 2016.

Have a safe, healthy and peaceful holiday season. Together, we can hopefully exceed all of our targets next year.