Is telecommunications exclusively under federal jurisdiction in Canada?

We used to think so, at least since the Supreme Court of Canada ruled on the AGT/CRTC case in 1989 and the Guèvremont/Quebec case in 1994. But, recent cases suggest that federal authority may merit “new reflection”.

My friend Michael Ryan has an article in the November issue of Canadian Bar Review that suggests that the division of powers may not be so clear in the case of non-facilities-based telecommunications services providers – specifically those entities that are not physically involved in transport across provincial boundaries. In 2009, the Supreme Court ruled on Consolidated Fastfrate versus Western Canada Council of Teamsters.

Referring to Fastfrate’s role, [Rothstein J] said that its “presence at both the originating and terminating ends may mean that it can provide a comprehensive service to its customers, but this does not change the fact that it is still only a shipper using an interprovincial railway or trucking company.” [emphasis in original]

The article reviews various cases in depth, and specifically identifies provincial consumer protection legislation as an area where questions of authority may arise.

As a consequence of the recent decisions of the Supreme Court of Canada, the bounds of federal authority over telecommunications undertakings are less certain than they have been for many years. It is left to future decisions to determine more precisely where the new boundaries lie.

Given that my legal training used to consist of tele-training for the California bar through episodes of LA Law, my interest in the article is somewhat voyeuristic. I’m sure some members of the Canadian bar will be looking at opportunities and challenges inspired by this article.

Innovation drives productivity. I understand that point. But what is the best way to drive innovation?

A much tougher question. Governments around the world are doing what governments typically do when they want to incent behaviours: use the lever of money.

A couple weeks ago, Canada threw $80M toward the problem, issuing a press release saying that it was “invest[ing] in Canadian business innovation [to make] Canada a global leader in the digital economy.”

But if money is the only lever that is being used, a country can only “lead” until some other region opens its wallet even more. Europe is now proposing to spend €80B (that’s right – B as in Billion – Euros) in funding for research and innovation, citing “a €120 million research investment by the EU enabled the 3G mobile market that we know today, worth €250 billion”. The implication being that the EU got a 2000 times return on its investment in 3G. That kind of economic analysis may be what makes Europe such a beacon of fiscal leadership that guides global markets today.

But that is not what I want to talk about. Nor will I look at whether the EU can actually write a cheque for €80B.

I’m just not convinced that we have the right approach in governments throwing money toward selected performers of research and innovation. It seems to me that application based programs have winners and losers. Some group of bureaucrats sit in judgment over projects and determine which are naughty and which are nice, which get funding and which get rejected. There are just so many problems with this approach, not the least of which is that governments are not known for making winning decisions.

Are innovation incentives rewarding the wrong kinds of companies? As I wrote earlier this week, if an innovation is going to result in a productivity improvement, why isn’t the business doing it on its own? Why wouldn’t the business be trying to improve its profitability without the need for cash from a government program?

Let’s not forget to look at where the government program is being funded – the source of those tax dollars. Profitable companies – including those that took the risks and innovated on their own prior to the program – are seeing their profits taxed so that companies with lower risk tolerance could get a handout. There seems to be something inherently wrong with the kind of Sherwood Forest code of justice, that takes taxes from winners and innovators and hands it over to their competitors who weren’t willing to innovate on their own.

Governments need to innovate in their approach to managing behaviour. Protective tariffs block competition, reducing incentives to innovate and increasing costs for consumers and businesses that use the goods as inputs. Restrictions on trade, investment, paperwork and more need reform to be part of government leadership in innovation. Government handouts aren’t innovative. Getting out of the way would be a novel approach for government.

Can we use the levers of increased competition, coupled with increased willingness and need to take risks, in order to more systemically drive an innovation economy?

It’s only $2M, so why get worked up?

I’m referring to the decision by FedDev Ontario to give $2M of your tax dollars to some associations of angel investors. Four groups are getting $50,000 each to develop websites and promote their organizations in order to expand their memberships and attract additional investors. A national organization (NACO) and its Ontario affiliate (NAO-Ontario) scored more than $1.8M.

While the press release claims that this money will “attract greater angel investment” and uses language like “increasing the investment pool”, call me cynical.

If the investors who are members of these associations actually believed that the money would have a benefit, why aren’t they ponying up the risk funding themselves?

Would any of these investors put money into a company that didn’t have its own website? Are their investments going to be looking for the government to fund their promotion?

Why is the government picking these associations to support over any other associations or groups of angel investors?

Sure, it is only $2M, but as I wrote a couple weeks ago, (and echoed this weekend by Michael Geist) this seems to be yet another play being run without an overall Digital Strategy.

At what point do broadcasters stop being broadcasters?

At the IIC conference in Ottawa earlier today, Greg O’Brien of Cartt.ca reported that much money “can be diverted to content by switching off expensive OTA transmitters in favor of satellite.”

Most Canadians watch TV using a cable or satellite based broadcast distributor. Those distributors are often accessing the station using a satellite or fibre feed which raises the question in my mind: what is actually being broadcasted?

At what point does a broadcaster cease being a broadcaster? If there is no need for the radio frequencies for over-the-air transmission, then how do we distinguish between that TV station delivering content and say, a website delivering content? More and more of the set-top boxes are IP based, essentially acting as specialized personal computers many of which are Microsoft powered.

So, in many homes, the family entertainment room has already been transformed into a 40-60 inch computer monitor, connected to a specialized computer with a non-alphabetic infra-red keyboard (the remote control), which is connected to an IP based network. Instead of entering a “www” address, the user enters a shortcode, such as 16, in order to view content coming from another site.

Ignore the legacy model and I look at how my kids are buying entertainment. The set-top box driving the big screen TV is an old computer with Netflix; it could just have easily been Apple TV. Little stands in the way of what we currently think of as network programming being delivered over that same computer network.

Which begs the question: At what point does our home entertainment shift away from being regulated by the CRTC?

This question becomes important since it ultimately determines the amount of choice available to consumers. It has implications for consumption of domestic content and the Canadian production industry. Indeed, as consumers start to access programs directly, are local stations going to have a role beyond serving as a portal selling local advertising?

I recently read a piece from the Canadian Association of Journalists (CAJ) called “Best practices in digital accuracy and correction“. It speaks to the challenges of publishing in a 24 by 7 online environment and following the guiding rule of “When we make a mistake, we correct it promptly and ungrudgingly, and in a manner that matches the seriousness of the error.”

The report speaks of 3 principles:

• Published digital content is part of the historical record and should not be unpublished. News organizations do not rewrite history or make news disappear.
• Accuracy is the foundation of media credibility. Though we should resist unpublishing, we have a responsibility to ensure the accuracy of all published content. If we err, or if new relevant facts emerge, we should publish correctives and/or update online articles as soon as we verify errors and/or new information.
• Transparency demands that we are clear with audiences about changes that have been made to correct/amend or update digital content. We should not “scrub” digital content, that is, simply fix it and hope that no one has noticed.

Craig Silverman,  founder of the website, regrettheerror.com, is quoted contending “that acknowledging inaccuracy is even more essential in the digital world because errors are “now forever” as they are cached online and spread worldwide through search engines and social media.”

The best practices are available in pdf format as well.

On Friday afternoon, CBC took a story by Luann Lasalle of Canadian Press and made a number of errors when posting it to its Technology& Science page:

• CBC applied an inaccurate headline, “Rogers tells CRTC to level telecom rules”. I doubt that Rogers would have told the CRTC to level the rules; Industry Canada is the organization that has been reviewing the rules. The CRTC doesn’t make laws – Rogers knows this and the CBC should as well. The story itself doesn’t mention the CRTC.
• CBC added an old stock photo (apparently from Rogers AGM in April) and applied an incorrect caption “Rogers Communications Chief Executive Nadir Mohamed urged the CRTC to apply foreign ownership rules equally to all telecom players.” Again – it was not the CRTC that would have been urged and the caption implies that this photo was taken during the briefing.
• CBC edited the Canadian Press story and changed Industry Minister Christian Paradis’ name to Pierre. Perhaps they were thinking of the Liberal Quebec MNA.

I used the CBC Typo Report capability on its website at about 4:15pm and tweeted an alert to the errors as well. CBC updated the story at 4:48, but it did not correct the errors that had been brought to their attention more than a half hour earlier.

The article has attracted a large number of comments and the errors have generated comments. For example, ImPaled wrote at 9:49am on Saturday morning: “A private corporation like robbin rogers tells a Canadian citizens watchdog comittee the CRTC what to do?”

At the time of writing this, the errors have been on the CBC website for 19 hours and attracted 71 comments. What is the appropriate way to deal with flaws, given that the bell cannot be un-rung? As the CAJ’s Best Practices suggest, it would be inappropriate to “simply fix it and hope that no one has noticed.”

CBC’s corrections policy states:

We make every effort to avoid errors on the air and online. In keeping with values of accuracy, integrity and fairness, we do not hesitate to correct a significant error when we have been able to establish that one has occurred. This is essential for our credibility with Canadians. When a correction is necessary, it is made promptly given the circumstances, with due regard for the reach of published error.

The fact that a situation has evolved so that information that was accurate at the time of its publication is no longer accurate does not mean that an error was committed, but we must consider the appropriateness of updating it, taking into account its importance and impact.

In the olden days, editors and fact checkers would find errors in advance of publication. Today, very few fact checkers are employed at all, let alone getting involved in screening material in advance.

What are your expectations for dealing with corrections from your news sources?

UPDATE [November 27, 11:30am]: Nearly 48 hours later, CBC has still not edited the story or made the most basic correction: getting the name of the Industry Minister right. I checked other news outlets to see if any others used an incorrect name for the Minister, thinking that maybe the CBC wasn’t really responsible for the errors; maybe an early version of the Canadian Press story got it wrong. But in every other case, news outlets across the country carried the story correctly identifying the Minister of Industry and not having any mention of the CRTC. Sympatico, Winnipeg Free Press online, Winnipeg Free Press print edition, The Record, News Radio 957, Medicine Hat News, Penticton Herald, Guelph Mercury all got the story right. Some ran the story with edits, most ran the full text. None said that Rogers CEO Nadir Mohamed said anything to the CRTC. No other news outlet messed up the name of the Industry Minister.

Which then raises the question of how did the CBC get it wrong and why? And why hasn’t CBC fixed the story yet?

UPDATE [November 27, 8:30pm]: In an update to the story time-stamped 6:19pm today, CBC finally changed “Pierre Paradis” to “Christian Paradis”, and added a “Correction & Clarification” below the story, saying “Christian Paradis is the federal minister of trade. He was misidentified as Pierre Paradis in an earlier version of this story.” Except that Canada doesn’t have a Minister of Trade. Ed Fast is the Minister of International Trade while Christian Paradis is Minister of Industry (as well as Minister of State (Agriculture)).

UPDATE [November 27, 10:00pm]: Minister Paradis’ portfolio was corrected at 9:20pm. Why monitor this particular story? Perhaps because it demonstrates how shoddy the editing and review process has become for some media sources and how slowly some agencies respond to clear errors. In the meantime, thousands of viewers saw the erroneous information and hundreds wrote comments, many in direct response to the incorrect account that CBC presented. Most will not return to the story to see the correction.

UPDATE [November 28, 8:35am]: CBC has finally fixed the article, removing references to the CRTC. Instead of the headline “Rogers tells CRTC to level telecom rules”, CBC now has the story titled “Rogers asks to level telecom rules.” A very different tone implicit in that change, but the story now appears at the bottom of the Technology and Science page, since it is 3 days old at this point.

It makes me wonder: is it sufficient for CBC to simply note (at the bottom of the original story) that the current version contains a correction?