On the same day that Minister Clement delivered his Digital Economy update, the OECD released its OECD Information Technology Outlook 2010 [pdf, 7.0 MB].

The report has some interesting data that speaks to my theme of the need for Canada to turn its attention to adoption – encouraging greater digital literacy and understanding the factors that are keeping Canadian homes and businesses from embracing all of the capabilities of the digital economy.

While the usual critics quickly pointed out that Canada has supposedly slipped to 11th place in broadband adoption, I didn’t notice anyone looking at the data itself [xls, 42 KB] and asking serious questions. The most immediate question should be “why is Canada’s broadband data is 3 years old, despite current information being available from the CRTC?”

Interestingly, the use of old data still didn’t keep Canada from a 3rd place standing for Figure 4.3: Business use of broadband [xls, 48 KB]. But we fall to a middling 15th place when looking at businesses that have a website. Business adoption of ICTs should be a real concern. As the OECD found:

Canada is an exception in that it has relatively few businesses reporting online selling compared with those reporting online purchasing.

In his keynote address to the IIC on Monday, Minister Clement reiterated the five areas he considers critical to creating a digital Canada. Two of these deal directly with these issues of adoption:

I know that the best infrastructure, with the highest speeds, is of little use if businesses are not exploiting it. Canadian businesses, large and small, have to adopt technology in order to become more productive, innovative and competitive.

And on this front, we still have work to do. According to the Organisation for Economic Co-operation and Development, Canada has a middling rank in terms of the size of our ICT industry and how rapidly our businesses adopt digital technologies..

Similarly, the Minister observed that Canada needs to do more “to develop a digitally skilled workforce.”

Most encouraging is the upcoming intergovernmental collaboration to address digital economic development. Perhaps this can lead to targeted measures to put computers and broadband connections into every household with school aged children, as you have seen me advocate on these pages in the past [for example, here and here].

An interesting decision from the CRTC earlier today about billing services to corporate affiliates.

The case that led to Telecom Decision CRTC 2010-867 dealt with Bell Aliant and Bell Canada providing certain access services to Rogers and its affiliate, Fido.

The Bell company tariffs for channelizing competitor digital access circuits (CDN) state that if a carrier is co-located in a Central Office, then it must pay retail rates for any channelizing services. Fido was receiving channelizing services in some locations that have a Rogers co-location presence, but it demanded the lower wholesale rates.

Rogers argued that previous Commission decisions suggest that parent companies and affiliates do not always have to constitute a single customer. In fact, Rogers showed that there are at least three examples where the Bell companies treat the affiliates as separate entities, in each case tilting revenues higher in favour of the telco:

1. Local interconnection traffic imbalances are calculated separately, generally resulting in a higher imbalance in favour of the Bell companies;
2. RCI and Fido pay separate rates to access the Bell companies’ Operational Support System, resulting in higher revenues for the Bell companies; and
3. RCI and Fido are separate customers for extended area service transiting and transit services resulting in higher revenues for the Bell companies.

The CRTC agreed with Rogers.

It was interesting to analyse what Industry Minister Tony Clement did not say yesterday in a luncheon keynote address at IIC [press release and backgrounder here, speaking notes here]

The Minister characterized the 33-page address as a “Marathon speech on dig economy and telecoms” but many have reported that there wasn’t a lot of new information.

For example, Reuters reported that:

Canada will soon start consultations on how to conduct its next auction of radio frequency spectrum while also reviewing foreign investment rules for the telecoms sector, Industry Minister Tony Clement said on Monday.

That isn’t really news. After all, Reuters said pretty much the same thing in a story 7 weeks ago.

As Steven Chase of the Globe and Mail reported, the story isn’t that there will be a decision on foreign ownership; the story was that the decision wasn’t announced yesterday. Why?

Talmudic logic suggests that there must be a message in a text that was appropriately characterized as a marathon. That is what makes reviewing the speech such an interesting exercise in analysis.

There is more than meets the eye in this major address. What are the messages?

Plans for The 2011 Canadian Telecom Summit are progressing well.

We have had a positive response from our sponsors and the agenda is starting to fill up nicely. All of our regular speakers from the Regulatory Blockbuster have already confirmed that they will be back.

In addition, CRTC Chair Konrad von Finckenstein is confirmed to return and we plan to conduct an interview format again this year. The conference website is being kept current as speakers and sponsors are confirming their places in the program.

The major carriers and suppliers to the industry are lining up again to help make The Canadian Telecom Summit the preeminent gathering of Canada’s communications leadership.

We have already started to receive registrations; save by registering early. Be sure to get onto our mailing list. The 2011 Canadian Telecom Summit is a little more than 6 months away. Hold the dates: May 31 – June 2, 2011 in Toronto.

I want to return to the letter to the editor by the Michael Ignatieff. Yesterday, I said in passing that there were a number of issues arising from the Opposition Leader’s approach.

Here is the full text of the letter:

This summer, while I crisscrossed the country on the Liberal Express, rural Canadians told me the struggles they face without access to high-speed Internet (Disconnected: Canada’s Digital Divide – Nov. 16). We often experienced this first hand when our bus left city limits. Today the Internet is a critical tool to connect citizens to banking, tourism, education and health services. Without it, communities cannot develop their economies and create jobs and opportunity for their citizens. Canadians without adequate Internet service will become second-class citizens.

Last May, I outlined my party’s commitment to dedicate $500-million from the next spectrum auction to achieve the goal of 100 per cent high-speed Internet connectivity within three years, and expand mobile phone coverage for rural Canada.

All Canadians should have equal opportunity to succeed, no matter where they live. We must take leadership now to make access to high-speed Internet universal for all Canadians.

The linkage between the next spectrum auction and rural broadband is important. The way the licenses are divided will determine whether rural service providers will be able to compete for spectrum to deliver next generation broadband.

You can’t experience rural broadband challenges first hand when travelling on a bus, without first acknowleding that mobile broadband is indeed a way to provide service to rural Canadians. Along with other wireless technologies, mobile service is part of the solution for rural and remote areas. But as those on board the Liberal Express discovered, some of the companies that have spectrum aren’t deploying services for universal coverage.

The way spectrum has been getting auctioned, rural areas are bundled in with the urban centres. So, the carriers who buy more spectrum to serve the densely populated big cities end up controlling the less dense areas as well – in a sense, they get the rural licenses for free. How can we ensure that rural spectrum isn’t being hoarded without being deployed to the benefit of rural residents? 

Let’s also be sure that we are setting expectations appropriately. I hope this isn’t news for you – not every Canadian will have access to fibre optic gigabit speeds, despite such speeds being available in the urban areas. This is a reality. We need to stop viewing differences in internet delivery as creating different classes of Canadians.

In any case, the challenge of connecting a rural health clinic is very different from connecting all Canadians who live in sparsely populated remote and rural areas. What is affordable ultra-high connectivity for that health clinic is very different from what a consumer might be willing to pay. Rural Canadians don’t need gigabit speeds to benefit from e-Health; Costco won’t be selling MRI machines to have people transmit their diagnostic images from home so let’s get real. Most of the applications mentioned by the Opposition Leader aren’t bandwidth intensive and some, such as banking, don’t even need broadband.

The letter speaks of economic opportunities that arise from internet connectivity, but ignores the biggest problem facing Canadian connections: the large number of Canadians who don’t subscribe to services at their doorstep.

When will we see policy proposals that focus on broadband adoption, rather than broadband plumbing?