An essay in Time Magazine by Clemson economist Thomas Hazlett caught my eye. He opens “How to Neuter the Net Revolution” with a quote from Professor Lawrence Lessig:

The Internet revolution has ended just as surprisingly as it began. None expected the explosion of creativity that the network produced; few expected that explosion to collapse as quickly and profoundly as it has.

The kicker is that these words are from a paper written in 2001 promoting rules to ensure an open internet.

At that time, Lessig wrote:

The Internet promised the world — particularly the weakest in the world—the fastest and most dramatic change to existing barriers to growth. That promise depends on the network remaining open to innovation. That openness depends upon policy that better understands the Internet’s past.

The internet revolution didn’t come to an end in 2001 as Lessig warned. I agree that the openness of the internet “depends upon policy that better understands the Internet’s past.” However, I am not convinced that share the same understanding of that history.

Some observers are challenging some of the more idealized assumptions being set forth to justify government regulation. Hazlett writes “the idea that the Internet is everywhere neutral, that all bits are treated equally, is false.” Further, Frost & Sullivan principal analyst says Dan Rayburn wrote: “There has never been any rule or understanding that certain networks must carry traffic for free.” and in the Washington Post, Larry Downes writes “The engineering of the Internet has never been “neutral,” nor could it be. Voice and streaming video traffic, for example, which is much more sensitive to delays, is regularly given priority.”

Downes also writes in the Harvard Business Review:

As far back as 1999, at the dawn of broadband Internet access through DSL and cable modems, the same advocates were making the same urgent pleas. Absent immediate nationalization of the Internet, they argued, ISPs were certain to block or otherwise disadvantage start-ups, leaving the Internet in the hands of a few dominant content providers. You know, like AOL, GeoCities, and Blue Mountain electronic cards. (Google search was still in beta.)

Back then, fortunately, the White House, Congress, and the FCC ignored the doomsayers. Instead, a rare bipartisan coalition held fast to the view that for emerging technologies, light-touch regulation was more likely to encourage competition and discipline market participants than the heavy hand of regulators.

Plus ça change…

To better understand the past, it may be helpful to look to an FCC working paper from 1999 [pdf], entitled “The FCC and the Unregulation of the Internet“.

The author, Jason Oxman, cites 5 key FCC policy decisions that benefited the development of the internet:

• Fostering the development of an interconnected telecommunications network that ensured near universal availability of a reliable and affordable telephone system over which data services could be offered.
• Determining through the Computer Inquiry proceedings that computer applications offered over that network were not subject to regulation, giving rise to the unregulated growth of the Internet.
• Exempting enhanced service providers from the access charges paid by interexchange carriers, helping drive the availability of inexpensive dial-up Internet access.
• Deregulating the telecommunications equipment market while requiring carriers to allow users to connect their own terminal equipment, helping to foster the widespread deployment of the modem and other data equipment tools that can be easily attached to the public switched network.
• Implementing flexible spectrum licensing policies that permit innovative uses of wireless data services, leading to the development of wireless Internet applications.

And the paper cited fundamental lessons learned from 30 years of application of a deregulatory approach by the FCC:

• Do not automatically impose legacy regulations on new technologies,
• When Internet-based services replace traditional legacy services, begin to deregulate the old instead of regulate the new; and
• Maintain a watchful eye to ensure that anticompetitive behavior does not develop, do not regulate based on the perception of potential future bottlenecks, and be careful that any regulatory responses are the minimum necessary and outweigh the costs of regulation.

Prescient words from a paper from 15 years ago: “Do not regulate based on the perception of potential future bottlenecks, and be careful that any regulatory responses are the minimum necessary and outweigh the costs of regulation.”

A few weeks ago, I asked if Canada’s net neutrality rules has delivered the benefits to justify the costs of regulation:

Five years later, how many countries have followed Canada’s lead? Should we be reviewing the policy framework for traffic management and content delivery examining whether our rules are appropriate?

Canada may have been first, but one might ask if Canada can be considered a leader if other countries haven’t followed behind. Are Canadians – consumers, creators and carriers – well served by the current “comprehensive approach to Internet traffic management practices”?

As Dan Rayburn observed “Net neutrality is an incredibly complex set of problems that people keep trying to simplify and politicians try to turn into sound bytes.”

What lessons from the past can continue to be applied?

When the FCC issues its determination, it may be worthwhile for the CRTC to begin a fresh look at its regulatory policy framework to ensure that Canadians continue to be positioned to lead in a global digital economy.

In case Canadians thought only Canadian politicians couldn’t resist the urge to interfere with the deliberations of independent regulators, US President Barack Obama waded into the FCC’s open internet proceeding today with a statement on Net Neutrality. Importantly, the statement recognizes that his perspective is not the final word:

The FCC is an independent agency, and ultimately this decision is theirs alone. I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.

The issue, of course, is more complex than that laid out in the President’s statement.

The Chair of the FCC, Tom Wheeler replied, thanking the President for his input and made it clear that it is just one submission of thousands received, with more to come:

I am grateful for the input of the President and look forward to continuing to receive input from all stakeholders, including the public, members of Congress of both parties, including the leadership of the Senate and House committees, and my fellow commissioners. Ten years have passed since the Commission started down the road towards enforceable Open Internet rules. We must take the time to get the job done correctly, once and for all, in order to successfully protect consumers and innovators online.

As Chairman Wheeler observed, there are different routes that can be followed and each presents challenges in creating an enforceable framework, able to withstand legal challenges: “The more deeply we examined the issues around the various legal options, the more it has become plain that there is
more work to do.”

Canadians should keep in mind that on this file, the CRTC is more than 5 years ahead of the United States. In October 2009, Canada’s regulator issued its rules on internet traffic management practices, ITMPs, in Regulatory Policy 2009-657.

The next day, more than 5 years ago, I observed: “Later today, there will be an announcement from the FCC that will be much heralded by many who confuse political rhetoric for action. It will be a long process before the US has any kind of net neutrality regulation, let alone the proposed framework that will be articulated today by the FCC.”

A long process. Hah!

Five years later, the US is still fighting over how it will regulate the internet.

Is it actually clear that the FCC will be able to regulate it? Indeed, is it clear that the internet should be regulated?

The Commissioner for Complaints for Telecommunications Services (CCTS) issued its 2013-2014 Annual Report [full document pdf] this morning and the great news was that complaints declined 17% year over year, despite growth in total customer connections. As CBC reported:

Covering everything from landlines to cellphones, and both wireless and wired internet providers, the CCTS is the independent agency tasked with sorting out who’s wrong and what the compensation should be when paying customers have problems with their telecom services.

The CCTS saw a total of 11,340 complaints in the past year. That’s down by more than 17 per cent from 13,692 the previous year. And that’s the first time the number of complaints has actually decreased in the seven years the agency has existed.

So why would Open Media write: “Big Telecom customer mistreatment is still running rampant, as official report confirms 11,340 complaints in just 12 months”?

“Big Telecom” is the Open Media euphemism for Bell, Rogers and TELUS: “The Big Three – Bell, Rogers, and Telus, along with their subsidiaries – accounted for 77% of all complaints.” Open Media continues: “Independent providers received considerably fewer complaints – the largest, Wind Mobile, accounted for just 4.5% of all complaints.”

As the Globe and Mail reported, it is worthwhile looking beyond the raw data. For example, one might ask what percentage of total customers these companies represent.

Let’s take a look at the numbers. In TELUS’ latest quarterly report, it reported 7.9M wireless subscribers, 1.4M internet subscribers and 3.2M phone lines for a total of 12.5M connections. Rogers has 9.5M wireless, 2M internet and 1.2M wireline for a total of 12.7M connections. Bell (BCE) has 7.95M wireless, 3.2M internet and 7.3M wireline for a total of 18.5M connections. Videotron has 550,000 wireless subscribers, 1.4M internet and 1.2M wireline for a total of 3.2M connections. WIND Mobile recently reported having 750,000 customers.

Videotron had a modest increase 1% – just 3 more – in total complaints year over year. All 4 of the other companies experienced reductions in the number of complaints received by the CCTS. But it is noteworthy that TELUS, with 12.5M customer connections had only 951 complaints to the CCTS – 0.0076% – a decline of about 25% year over year. WIND Mobile also had a significant improvement in its complaints (-20%), but still received 510 complaints – 0.068%. The decrease in total complaints regarding WIND Mobile is more significant since its customer base grew by 25% in the same period.

Bell had a complaint rate of 0.025%; Rogers had 0.026%. Videotron’s 294 complaints represents a rate of just 0.009%.

Shaw’s 3.3M connections generated just 97 complaints – 0.0029%; SaskTel has 1.3M customer connections who generated just 91 complaints – 0.0067%; MTS had 120 complaints from its 1M connections – 0.012%.

One would expect more complaints to be generated from wireless services – there are significantly more wireless subscribers than wireline telephony or internet services. There are significant differences between all of the service providers – integrated and independent, although you wouldn’t know that based on media releases from consumer groups.

We need better reporting of the numbers. It seems to me that complaint rates are a metric worth examining.

It is interesting to see telecommunications policy issues being covered by the general media. Of course, we expect to see coverage of communications issues in the business press. The sector is a large employer, makes massive investments in infrastructure and virtually every citizen buys communications products and services every month. Still, covering the sector in the business section is different from seeing coverage move to the front page or the general editorial pages.

Even then, it is perhaps more expected for telecom policy to be covered in The Washington Post. But it struck me as unusual for an OpEd to appear in The Detroit News.

In “Who is winning the broadband race?“, Richard Bennett makes an argument that resonates with thoughts I have expressed on these pages:

Too often, however, enthusiasts simply skim the surface of broadband statistics on speed and price and reach erroneous conclusions. While it certainly is the case that a dozen or so nations score higher than the U.S. on speed tests, it’s not always the case that the gap between the U.S. and the higher-scoring nations is significant; and even if it were, in many cases the higher speeds in other nations are caused by factors that have nothing to do with policy and regulation.

The US is in the midst of a review of broadband regulation, largely centred on a belief that its Federal Communications Commission (FCC) needs to be empowered to assert authority over network neutrality issues. Some of the proposals being floated would declare internet services to be regulated as “common carrier” services, contrasted with the long standing treatment as “information services”. Verizon filed a paper with the FCC arguing that such a declaration would not withstand a court challenge.

Bennett’s article concludes:

In reality, the nations that have treated broadband networks as public utilities are high on promises and low on results. France and Italy are the truest examples of the utility model for broadband; wired broadband in France is no faster than mobile broadband, and Italy has the slowest networks in the G7.

AT&T recently argued that some service providers are investing in regulation, rather than investing more in building networks.

It is great to see more citizens getting engaged in telecom policy issues. I like seeing coverage in the media. Unfortunately, a recent report on coverage of Net Neutrality said “Experts Agree: Majority of the Media is Missing Something on Net Neutrality” The Society of Professional Journalists hosted a discussion on “Why Media Should Care about Net Neutrality.”

Among many salient points made, there were two main takeaways:

1. It is imperative for the media to get it right when discussing net neutrality, and
2. The majority of the media don’t get it right.

Many similar issues are coming up in Canadian regulatory proceedings as we see in other jurisdictions. TV unbundling, wireless competition, wholesale internet access, net neutrality. These communications policy issues are complex and often benefit from looking at secondary and tertiary impacts. I have talked about the complexity in the past, referring to the need to think 3 moves ahead, like a chess master.

How can we help “get it right” in reporting?

How can we help drive even more engagement, and more informed engagement, in the processes by a broad spectrum of consumers?

The CRTC is acknowledging that it is having a tough time keeping up with ‘miscreants’ placing unwanted telemarketing calls to Canadians.

In its latest report to Industry Minister James Moore on the operation of the National Do Not Call List, the CRTC identifies “Challenges and Opportunities.” The first “opportunity” listed deals with caller identification spoofing:

“A major challenge has emerged in the form of caller identification (ID) “spoofing,” which is the falsification of the phone number that appears on consumers’ caller ID displays.”

Caller ID spoofing is an important capability that was built into the phone standards to enable people to work from one location but show a different caller identification. This way, for example, a call centre can show the toll-free call back information for the underlying client, not the agent, who may be located half way around the world. Placing such information into the caller ID field is actually a requirement in the CRTC’s telemarketing rules.

But we have all been victims of caller ID spoofing that is done for less than honourable purposes. In some cases, the CRTC has found that the ‘miscreant’ operators have used the call identification of legitimate businesses to make their unwanted calls. In one such case, more than 30,000 calls per day were being made, falsely being represented as being originated by a well known, legitimate Canadian firm.

The CRTC joined an international inter-agency collective to combat caller ID spoofing. The Commission has acknowledged that “It is extremely challenging to enforce the Rules in such circumstances given the difficulty in tracing such calls to their origin, which is often outside of Canada.”

The CRTC says that “It is working with the private sector on a system to allow consumers to report spoofed calls by simply keying in a number on their phones.”

In a letter widely distributed to telecom service providers in early October, CRTC Telecom Vice-chair Peter Menzies said:

Notwithstanding the CRTC’s success to date in reducing unwanted calls, our ability to enforce the law has been hampered by caller ID spoofing which is used by certain telemarketers to hide their true identity. The telephony honeypot and other tools, such as *50, will enrich the much needed intelligence to address the problem of caller ID spoofing.

The *50 program will enable consumers to report abusive telephone calls, along with the associated call detail records, to carriers, reputational services and law enforcement, free-of-charge. These records will enable carriers and the CRTC to determine the origin of the call, thereby thwarting miscreants’ attempts to hide their true identity and provide the necessary information for investigations. The CRTC will be deploying *50 as a voluntary and pilot program for carriers in the coming months with the goal of formally launching the program in late 2015.

Keep in mind that there is already a “Call Trace” feature for customers to help law enforcement tracing of calls. In most cases, that involves dialing “*57” immediately after hanging up on a threatening or abusive call. That feature puts a flag into a call detail record, enabling your phone company to only release to law enforcement personnel the correct record out of potentially dozens of calls you received that day. Thanks to the Supreme Court’s decision in June [R vs Spencer], the police get the call information once they go to your phone company with a warrant.

The CRTC consideration of a different code number – *50 – raises all sorts of issues. Will consumers be confused by having two different numbers for call trace? Does the CRTC expect carriers to release the call detail records without production of a warrant?

Will this actually be effective in stopping calls from off shore ‘miscreants’?

How much are Canadians spending to maintain the enforcement infrastructure? The CRTC spent just over $3M in its enforcement branch and there was an additional $2.5M spent administering the do not call list and the complaint databases. The CRTC issued $1M in notices of penalties but it did not report how much of the $1M was actually collected. Note that any funds collected are sent to the general revenues of the government.

I continue to receive calls from air duct cleaning services and companies that promise to fix my credit score, or my favourite, “the technical department of Windows.” The most effective way to deal with them is very un-Canadian and very low-tech.

Just hang up.