Another voice is calling for enhancing demand for a digital Canada. Today’s Globe and Mail has an interview with Google Canada chief Chris O’Neill who observes:

We estimate that there are roughly two million small businesses in this country, and less than half of them have a website. That is a problem [because] consumers are out there actively looking for what businesses offer, and it really is a missed opportunity.

He suggests that Canadians’ lower risk tolerance is part of the problem.

As I have written often on these pages, it is too easy to focus on the supply side – the networks – without enough time being given to looking at conditions that will stimulate demand. Increasing adoption of digital technologies, encouraging businesses to establish a web presence, attacking disincentives for private sector investment.

What else should be part of Canada’s national digital strategy?

The CRTC has approved changes to the way the National Contribution Fund operates, reducing some of the paperwork required for smaller competitive phone companies.

The Canadian Portable Contribution Consortium (CPCC) had proposed raising the contribution eligible revenue threshold for requiring audited statements to $100M (from the current $50M). Also, all companies that currently receive a local phone subsidy are required to provide audited figures; CPCC proposed requiring audits only if the level of subsidy will exceed $0.5M in a given year. Companies that do not exceed the audit thresholds are only required to file an affidavit attesting to the accuracy of their figures.

Finally, the CPCC has incorporated standardized audit requirements by reference to the Canadian Institute of Chartered Accountants (CICA), thereby ensuring that its requirements are kept consistent with CICA on an ongoing basis, rather than needing future amendments to be approved by the CRTC.

Telecom Decision CRTC 2011-529 includes a copy of the complete procedures guide. The changes provide welcome relief to the costs of regulatory compliance.

How can the CRTC regulate landlords, who aren’t carriers?

The issue has come up in the past when dealing with access agreements for wireline telecommunications services and broadcast television distribution. In 1999, the CRTC decided on a clear demarcation point for inside wiring so that tenants could subscribe to competitive telecom services [Decision 99-10]. Decision 2003-45 provided additional guidelines for negotiation of building access agreements.

But the CRTC has limited powers in regulating building owners or property managers. Instead, it uses indirect regulation – such as finding that an agreement between a regulated carrier and the unregulated party (such as a landlord) contravenes the Telecom Act or Broadcast Act – as it did in 2007 with the dispute over access by Shaw to buildings developed by Concord Pacific.

So this brings us to the case of San Francisco’s Bay Area Rapid Transit (the BART). Of course, the CRTC doesn’t regulate San Francisco, but it would be helpful to discuss whether such a case would contravene Canadian telecom regulations. Here is some background. it is increasingly common for landlords to install a distributed antenna system (DAS) for improving wireless connectivity inside highrise buildings or shopping centres or subway systems, for cellular, WiFi, internal mobile radio and first responders. Some DAS (such as Optiway) are multi-frequency and have sophisticated management capabilities. It is not uncommon for the DAS to be carrier independent and be owned by the landlord or managed on the landlord’s behalf.

On July 11, (as explained here by BART) the San Francisco subway system disrupted cellular access inside their subway tunnels because it believed that mobile services within their system would otherwise be used to incite illegal activity. For various viewpoints on the legality or correctness of this, see Public Knowledge and Public CEO (Public CEO asks the question of whether access to cellular service is an absolute right).

So, to return to the Canadian context, would Toronto Transit violate any laws if it did the same thing in the same circumstances? Or what about a major shopping centre? Or an office building temporarily cutting its distributed antennae in the food court?

To add some colour to the discussion, what if the landlord got into a dispute with just one carrier and disconnected their access to the interconnection point? Or refused to interconnect with other carriers?

Are Distributed Antenna Systems a form of “telecommunications facility” and are there conditions under which a building owner would become a telecommunications common carrier under the Telecom Act?

Is Canada’s telecom policy partly to blame for RIM’s woes? That is the opinion being expressed by University of Ottawa professor Michael Geist in his article this week in the Toronto Star. As I tweeted through the weekend, I think this is a bit of a stretch. Unlike Mark Evans’ article last week, Professor Geist isn’t looking for the government to fix what ails RIM.

While RIM’s current problems can’t be solved by government policy, some of its shortcomings may be a product of Canadian policy. Indeed, RIM is the quintessential Canadian technology company, reflecting the market’s strengths and weaknesses. If the government wants to avoid a Nortel repeat, part of the solution lies in addressing the problems that plague Canadian telecom policy.

But as you work through the Star article, I think there are some fundamental logical flaws.

For years, co-founder Mike Lazaridis promoted the data efficiency of RIM’s BlackBerry, while emphasizing that wireless spectrum is a finite resource. From RIM’s perspective, efficient use of data makes its devices more attractive to wireless carriers, which incur lower costs when compared with bandwidth-hogging devices such as the Apple iPhone.

The emphasis on spectrum scarcity and the value of currying favour with telecom carriers is very much a product of the Canadian marketplace.

Spectrum scarcity is not a uniquely Canadian challenge. It is a real engineering challenge for carriers around the world and the regulators who control the availability of new frequencies. As you continue to read through the Star article, ask yourself how many GSM carriers operated in the US market, where Apple had an exclusive deal with AT&T.

That RIM has had efficient spectrum utilization as a primary design criteria speaks to the engineering mindset in RIM’s leadership. It is reminiscent of the Dudley Moore ad for Volvo in Crazy People: “Volvos are boxy but they are good.” Blackberry is boxy but it is good. Apple’s iPhone is more of a Jaguar.

RIM’s woes weren’t caused by Canada’s government, nor will they be solved by it.

The CRTC issued the 2011 edition of its report “Charting Canadian Communications Change and Regulatory Implications: Navigating Convergence II” [press release here, full report – html, pdf (3.7MB)]

The report can be viewed as a snapshot of the information that has been gathered over the past year, examining the state of network evolution and competition; content and the reflection of Canadian identity; and, consumer choices and voices.

Telecommunications and broadcasting are rapidly converging into a single world of communications that offers innovative services to consumers, delivers these services in new ways and disrupts current business models. Consumers expect to access the services or content they want at anytime, anywhere, using whichever device they choose.

The executive summary speaks about the report as a reflection of the CRTC’s ongoing research and dialogue with stakeholders, analyzing key trends and identifying challenges and opportunities within the current regulatory framework. The report focuses on the evolution of wired and wireless networks, media-consumption and a variety of consumer-related issues.

As the digital economy becomes more sophisticated, policy, legislation and regulation must adapt. Areas that can be further deregulated—or in which new approaches may be required—are critically important to address. These areas include:

• ensuring fair and non-discriminatory access to networks
• increasing spectrum resources to meet Canadian demands
• creating new regulatory approaches to support innovation, access to affordable services and the creation and promotion of high-quality Canadian content, and
• addressing consumer concerns.

In the absence of a clear statement from the government on Canada’s national digital strategy, Navigating Convergence II is an important contribution to continue the discussion on how our digital economy may develop. The CRTC has not issued any pronouncements, proceedings, rulings or policies in this report, but it collects and presents in a logical structure the diverse views and issues that might be examined within future formal consultations and multilateral discussions.

Take a look at the report – it is quite readable at about 70 pages. I’d be interested in your comments.