For years, I have been writing about Canada’s well intentioned but misguided efforts to legislate against the scourge of spam.

Five and a half years ago, in 2009 I wrote about the potential for the legislation “to inadvertently chill some beneficial forms of electronic commerce communications.”

It isn’t that I like getting spam; or getting junk mail. The problem is that the Act seems to be banning electronic communications that would be completely legitimate in paper form. I’m not crazy about door-to-door sales people either, but we need to be careful about restricting communications in a democratic society. Instead, we can teach ourselves how to slam the door politely. And once in a while, we actually open our wallets and purchase something, due to an unsolicited communication, whether it was in person, on paper or transmitted electronically.

A year later, in 2010 I wrote that I was somewhat surprised with the response to the Act by people who normally stand up for civil liberties.

Typically, we see internet communications as being less restrictive than traditional media. We have so many people that talk about open access to information and actively promote it. I see so many cases of civil libertarians up in arms over attempts to block digital communications – even in cases where hard copies are stopped at the border or seized by police.

So it is somewhat satisfying to read on Barry Sookman’s blog that a new paper by Emir Crowne from University of Windsor’s Faculty of Law and Stephanie Provato says “the Act may not survive constitutional scrutiny as it unduly restricts freedom of speech.”

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?