Roadblocks for an innovation economy

An article yesterday in the Washington Post by Larry Downes says that the net neutrality debate has missed the point.

How did we get here?  Despite the doomsday scares of a technology apocalypse, the current fight over who and how to regulate the Internet is not about the future of innovation, Internet access, broadband pricing, competition, fairness, or motherhood. It’s something much less exciting, though, depending on the outcome, much more dangerous.

Downes’ conclusion, “At best, a full or partial government takeover of Internet access would almost certainly slow future network evolution” sounds similar to what I wrote in 2008 in a post called “Can net neutrality limit innovation?

Canada led the world in introducing enforceable net neutrality regulations when the CRTC introduced ITMP protocols for the implementation of internet traffic management in 2009.

Eight months earlier, in February 2009, in its Digital Britain strategy document, the UK said there was no need for net neutrality legislation. The UK was concerned that net neutrality regulation might prevent pricing innovation, differentiation of offers and serve to discourage investment in higher-speed access networks.

In its review of Mobile TV services, we see the CRTC’s regulatory forum being used to discourage precisely the kinds of pricing innovations that concerned the UK authorities. Downes wrote in his article in the Washington Post, “Just as taxicab companies are using regulators to stop Uber and Lyft, and hotels are lobbying for prohibitions on Airbnb, Netflix is using the net neutrality debate to improve its own bottom line.”

My views on Canada’s anti-spam law (CASL) are well known. I don’t think that it is a source of pride for Canada to have the democratic world’s toughest anti-spam regime. See, for example: “CASL is indefensible” and “CASL costs consumers“. As early as 2008, I warned “Worst case will see us get it wrong and introduce costs on legitimate businesses while doing nothing to stem the flow of the real garbage filling our inboxes.” In 2010, I wrote, “the bill would be better titled the Electronic Commerce Restrictions Act: it discourages many efficiencies that should be available to businesses of all sizes in reaching out to new customers.” CASL is yet another inhibitor for Canadian businesses to adopt digital technologies, and as I wrote earlier this summer, we should be wondering if CASL will limit the development of new technologies.

The CRTC’s own focus groups found that Canadians thought the Commission was “playing catch-up most of the time. The industry it regulates is changing so fast that the Commission never seems to be ahead of the change and is more reactive than proactive.”

This impression is a reality of attempting to regulate in the light-speed of our evolving digital economy.

Earlier this summer, Khosla Ventures had a “fireside chat” with Google co-founders Larry Page and Sergey Brin. They were asked “Can you imagine Google becoming a health company?” Brin replied:

Generally, health is just so heavily regulated. It’s just a painful business to be in. It’s just not necessarily how I want to spend my time. Even though we do have some health projects, and we’ll be doing that to a certain extent. But I think the regulatory burden in the U.S. is so high that think it would dissuade a lot of entrepreneurs.

The zeal with which regulators and legislators have intervened in Canada’s digital economy should be a concern to all of us. Is regulation protecting competition or competitors? Is regulation safeguarding consumers or building roadblocks for innovation?

In 2006, a Directive was sent to the CRTC [Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives]. At that time, Canada’s cabinet called for the CRTC to “rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.”

Are we seeing regulatory measures from the CRTC and Industry Canada that are as “minimally intrusive and as minimally onerous as possible?”

As I wrote last year (echoing calls from two years earlier), we are long, long, long overdue for a fresh look at Canada’s telecom policy.

10 tips for back-to-school online safety

Last year, I wrote about the launch of the TELUS WISE programme, an initiative available to Canadians free of charge to help advance “Wise Internet and Smartphone Education”.

This year, in time for the back-to-school season, TELUS and TELUS WISE have produced a list of 10 tips to encourage online safety.

  1. Review the permissions before giving permission. Apps and social sites often ask for access to personal information that could put you at risk. Set rules around what info you and your kids will share and with whom.
  2. Keep it private. It is vital to constantly check and adjust privacy settings within apps and social sites to keep up with ever-changing defaults. Looks for app settings that share information publicly and change it to close friends only.
  3. Set-up a 24/7 watchdog for your name. Create a Google alert for yourself and each of your family members to track how your names are being used online and where you’re being mentioned. Find out more on the TELUS WISE site.
  4. Less is more. Limit the amount of potentially sensitive information posted online to lower chances of theft or abuse – think twice before posting last names, age, school names, vacation location or other personal info.
  5. Keep connections personal. A good general rule is to only connect and share with people that you know in real life. “Friending” people online whom you’ve never met increases your risk of exploitation.
  6. Think before you click. Always read the full path of the URL link you are about to click to make sure it’s going to take you where you want to go.
  7. Don’t be found. Turn off geo-tagging on smartphones and tablets to keep from being tracked. When this feature is enabled, your exact location can be exposed even if you’re just posting a photo. Ensure that apps that rely on location (e.g. Google Maps) are the only ones that have location enabled.
  8. Lock it down. Set passwords that are at least six characters long. Use at least one symbol, number and uppercase letter; for extra security use different passwords for each website or account you use.
  9. Don’t log in and leave it. Always be sure to log out of social accounts and apps when you aren’t using them. Disable or deactivate accounts and apps you no longer use.
  10. Keep your digital household clean. Set a recurring 3-month calendar appointment to check your online profiles, confirm privacy and permission settings on the social media sites you subscribe to and review any apps that you’ve downloaded.

Many kids will be getting their first mobile phones or personal computers as they head to school next week.

I think these tips are worth sharing with your family and friends.

Hold the date – #CTS15

Hold these dates in your 2015 calendar: June 1-3.

We are at the preliminary planning stages for The 2015 Canadian Telecom Summit, the 14th annual gathering of stakeholders in Canada’s information and communications services and technologies sectors.

Plan to join us in Toronto next June.

You can still see the schedule from the 2014 event on the conference website. Some of the sessions are available to view on demand – click here for a listing.

Over the next month or so, we will be starting to put together the 2015 website. Be sure to get in touch if you are interested in speaking, sponsorship or attending.

Getting a second wind

Despite a report last week that Blackstone has decided that it is not willing to take the risk of investing in WIND Mobile, conditions appear to be improving for the company to find “an investor with deep pockets”.

Cash would enable WIND Mobile to expand its network and marketing and put the company in a position to pick up much of the new AWS-3 spectrum being offered early next year to operating new entrant carriers at significantly favourable prices.

A couple of CRTC decisions are helping all new entrants lower their costs of providing national services. As the only player with spectrum and distribution across most of English Canada, WIND Mobile should benefit most from the domestic roaming rulings this summer. The CRTC has banned exclusive roaming contracts, which should have the effect of enabling new entrants to roam on each others’ networks. The company has also benefited from a CRTC letter identifying a sharp reduction in domestic roaming prices. These two actions should enable WIND Mobile to work on aggressive consumer plans (such as a soon-to-be-announced WIND 35 plan) in time for the back-to-school sales season.

Last Wednesday, Mobile Syrup wrote about a leaked price chart showing that WIND Mobile will be offering national 3G roaming with data rates of just 5 cents per megabyte, down from $1. The company had previously been limiting roaming to 2G speeds because of concerns that roaming charges would be be too high for customers to stomach. With lower costs being passed on, consumers will also benefit from faster connections.

WIND Mobile has recently enjoyed impressive financial results despite having limited access to capital as its principal backer, Vimpelcom, seeks to sell its stake.

It could be that Blackstone walked away from WIND Mobile just as the company was starting to get its second wind.

Tiger ice cream and the digital economy

One of the best features of summer is the (almost) guiltless attitude to indulging in an occasional ice cream treat. In the area of my summer office, we have access to a few shops that feature more than 3 dozen varieties of Kawartha Dairy’s ice cream. Despite the availability of more modern flavours, such as Salty Caramel Truffle or Crème Brûlée, I like the nostalgia of Tiger Tail (orange ice cream with a black licorice swirl) combined with Creamy Orange.

I have used the ice cream metaphor a number of times on this blog. The first time may have been 8 years ago in reference to net neutrality, where I also invoked the imagery of the movie Pleasantville.

For all the talk of ensuring that networks will enable the creation of the next Facebook or Google, it is possible, perhaps likely, that calls to impose increased regulations, restricting services innovations, are going to have the opposite effect.

Canada led the world in actually creating regulations that give effect to net neutrality when the CRTC created its rules governing the internet traffic management practices of Canada’s internet services providers.

Mobile TV has been under examination by the CRTC to see if rules are being broken because people can’t get open internet video streaming for the same effective cost per megabyte as packaged mobile video. Frankly, my initial reaction would be to respond that mobile carriers marketing departments should be free to choose whatever products they want to offer. Some service providers only offer voice and text. Isn’t it up to the service provider to decide whether they offer data and at what speeds?

If you want open internet, here is the price per megabit per second and here are the terms and conditions. If you don’t accept those conditions, please feel free to find another service provider.

We don’t mandate that ice cream stores offer tiger ice cream – although maybe we should – nor do we limit them from offering more than vanilla flavour. We don’t even require them to offer vanilla.

As hard as it may be for some people to imagine, there really is a segment of the market that doesn’t want high speed open internet from their service provider. They may only want email. Others may want email and specific popular messaging. Some may want access to Facebook. Rather than having to take a $25-30 open data package, shouldn’t the service provider be able to target market segments based on specific applications? Might this get more people to get introduced to mobile digital services?

The government has continuously focused on supply side incentives for its digital strategy, funding infrastructure and avoiding the issue of demand side incentives. Although I have written about the need for Canada to help with targeted programs for low income Canadians, it has been the private sector that has done the best job segmenting the market and finding ways to launch services to get more customers.

It makes sense. It is self serving for the service providers to seek incremental growth. That is a good thing. Rather than discourage growth and investment, perhaps the focus of policy should be in encouraging that growth in targeted markets – such as services for disadvantaged Canadians or segments that have not yet gone on-line.

Arbitragers may want to have access to targeted service innovations; demanding equal access to the prices being offered for a different service. We have seen claims that some wireless carriers are taking advantage of their vertical integration, being affiliated with broadcasters or cable companies.

I might respond: “then switch suppliers”. Go across the street. The CRTC already made it easier to switch companies. If you don’t like the way your current company packages its bits and bytes, leave them.

I just don’t want to see central control of what flavours of services we can create through innovation, or examining the cost base for those services. If I wanted to add salty caramel truffles to my vanilla ice cream, it would cost a whole lot more than just getting the pre-mixed version. Should the dairy board be investigating why my ice cream shop charges the same price per scoop for truffle packed ice cream as it does for plain vanilla?

I doubt I would ever find tiger ice cream if my local shops needed to get bureaucratic approval.

The digital economy framework shouldn’t block service innovation and differentiation.

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