The new Federal Budget raises more questions than answers in respect of liberalization of foreign ownership:

The Government of Canada is committed to ensuring that Canadians can benefit from increased competition and investment in the telecommunications sector, which will lead to greater innovation and lower prices for consumers. Increasing foreign investment is an important way of strengthening market competition and attracting new capital and innovative ideas from abroad.

Consistent with the recommendations of the Competition Policy Review Panel, the Government is acting in Budget 2010 to remove the existing restrictions on foreign ownership of Canadian satellites. This will allow firms to access foreign capital and know-how and to invest in new and advanced technologies. The removal of restrictions will also allow Canadian firms to develop strategic global relationships that will enable them to participate fully in foreign markets.

Yesterday’s throne speech said “key sectors, including the satellite and telecommunications industries”. That was sectors, plural. Not just the satellite telecommunications sector. Well, what about removing restrictions on foreign ownership of Canadian carriers? Small ones, new ones, big ones. Only foreign ownership of satellites?

Enabling strategic global relationships? We were able to do that before, but ask just AT&T how well that worked out.

We’ll need to get some clarity on what is driving the focus on satellites.

Yesterday afternoon, amidst traditional pomp, the Usher of the Black Rod summoned Members of Parliament to the Senate chambers to hear the Governor General deliver the agenda of the Government: The Speech from the Throne [pdf, 1.74MB] .

Highlights from the perspectives of the Telecom Industry include a plan to liberalize foreign ownership:

Our Government will open Canada’s doors further to venture capital and to foreign investment in key sectors, including the satellite and telecommunications industries, giving Canadian firms access to the funds and expertise they need.

While some wondered whether this includes broadcasting, I suspect that this move is to apply on the telecom side only, leaving broadcasting ownership restrictions in place. We shouldn’t forget that the CRTC has asked the Federal Court of Appeal to rule on whether the Broadcast Act applies to ISPs. That could add a wrinkle to these ownership liberalization plans.

In some ways, this move tries to undo the uncertainty over investment rules that have clouded the sector going back further than just last year’s Globalive mess. Mentioning satellite could be a nod to concerns about inconsistencies with the approval of the sale of Telesat as well.

If the government adopts the first steps recommended by the telecom policy and competition review panels [as we discussed last month], the gates would first open up for new entrants and carriers with less than 10% market share. Could this mean liberalized access to additional capital for MTS Allstream? Changes will almost certainly take place too late to enable a Canadian location for Google Fiber.

The final frontier is discussed in another paragraph in the speech, perhaps a nod of recognition that Canada’s most remote regions will be reliant on advanced space-based technologies to provide a virtual umbilical to the masses of Canadians whose separation sometimes seems to be infinity and beyond:

Canada has been a space-faring nation for nearly 50 years. Our Government will extend support for advanced research, development and prototyping of new space-based technologies, especially in support of Arctic sovereignty. 

The government has listened to the many calls for the development of a national digital strategy and it plans to strengthen its Science and Technology strategy as well as modernizing intellectual property rights:

To fuel the ingenuity of Canada’s best and brightest and bring innovative products to market, our Government will build on the unprecedented investments in Canada’s Economic Action Plan by bolstering its Science and Technology Strategy. It will launch a digital economy strategy to drive the adoption of new technology across the economy. To encourage new ideas and protect the rights of Canadians whose research, development and artistic creativity contribute to Canada’s prosperity, our Government will also strengthen laws governing intellectual property and copyright.

Note the focus of “adoption” of new technology.  

Finally, the throne speech recognizes the challenges of law enforcement and national security operating in a digital environment:

… our Government will introduce legislation to give police investigative powers for the twenty-first century.

and

Working with provinces, territories and the private sector, our Government will implement a cyber-security strategy to protect our digital infrastructure.

Details will hopefully emerge later today with the release of the Federal Budget. Typically, the promises of the Throne Speech become more tangible when we see funding attached to the programmes in the Budget.

Liberalized ownership, modernized law enforcement and intellectual property protections will require legislative changes which can be challenging in a minority government. Will any one of the opposition parties set aside partisanship in favour of progress on the digital agenda?

It can be a fascinating exercise reading comments on news stories and blog posts about the state of Canadian broadband. People can be so passionate about the issue. Sometimes I wonder if some childhood traumatic psychological experience has made some of the writers so hostile. Did a phone company truck run over their bicycle? Maybe an installer drilled a hole through a lucky hockey stick when he was fishing wires through the wall?

Is Canadian broadband being sold to consumers for a lower price per month than what some residents of some countries pay each month?

No.

And I didn’t need OECD rankings or an econometrically-challenged study from Harvard to tell me that. After all, when  billions of dollars are thrown by some governments at building network, one would hope that there would be some kind of reduction in the monthly bill paid by consumers.

But let’s not make the mistake of saying that this makes those broadband networks less expensive. Not necessarily. Where do you think that government money came from? At some point, someone is paying the bill. So everytime you look at your paystub or make your monthly tax remittances, give thanks that there isn’t a hidden “broadband network fee” added onto the bill. 

Just one of many problems with comparative studies. 

This is why an overall literature review is required, to understand why differences exist. Not all experiences can (or should) be replicated.

I think all Canadians can all agree that we want to see continued investment in broadband connectivity: more fibre; more spectrum; more choices of services and packages; and, for solutions to be developed to provide reasonable connectivity to Canadians who are outside the urban corridors.

But we have to ask a number of questions. Given the fiscal realities of our Government in 2010, who is going to invest in new infrastructure? How do we create the right climate for the financial community to back that investment?

As we watch today’s Throne Speech for signals about federal leadership that may guide Canada’s digital future, keep those considerations in mind.

Verizon’s policy blog had an entry last week that I think is as relevant in Canada as it is for Verizon’s US readers. Kathy Grillo writes:

We all share the same ultimate objective: to ensure that broadband helps all Americans reach their full potential, while addressing important social challenges, providing the foundation for job creation and economic growth and, of course, giving consumers the opportunity to choose their own Internet experience.

The challenge is not in reaching a consensus on the objective; it is a question of how we get there.

Sound familiar?

Verizon sets out five elements to stimulate broadband deployment and increase consumer choice:

1. encourage demand by increasing computer ownership, computer skills, digital literacy, and online education;
2. incent new uses of the Internet that serve societal needs, such as energy savings, improved education, public safety and better and less expensive healthcare;
3. encourage continued innovation and investment to increase the options in networks, services, devices and applications;
4. recognize and encourage wireless broadband platforms as important in reaching unserved and rural areas through more efficient tower-siting processes and the identification of additional spectrum;
5. government intervention must be technology-neutral and must put choice in the hands of consumers, rather than subsidizing providers directly, targeted precisely to the needed effort.

The end-user direct subsidy approach is one that I have written about over the past few years, including our opening remarks at The 2008 Canadian Telecom Summit, nearly two years ago.

How will Canada approach extensions to the evolution of our digital strategy? Will tomorrow’s Throne speech provide guidance? If there are no new initiatives to be funded, as suggested by John Ivison of the National Post, how will the government provide appropriate incentives for the private sector to carry the torch?

On Friday, I wrote a little piece about a novelty 3G data stick developed by Huawei to capitalize on World Cup fever later this year. Let’s face it, now that Canadian businesses have gotten used to reduced productivity due to Olympic events being a distraction for the past two weeks, we have about 100 days until FIFA fills our screens and big screen TVs appear in the food courts of the office towers starting June 11.

From the Vancouver Olympics, we know that communications technologies have changed the way major events are being experienced by people around the world. We are watching and replaying the events we want to see wherever we happen to be, driving far more data across wireline and wireless networks.

So that brings us to the next big global sporting event, which will be the World Cup in June.

It happens that The 2010 Canadian Telecom Summit is also taking place in June – our event runs from June 7-9, finished in time to let everyone get back to work at watching the action on-line and on our mobile devices. Huawei will again be returning with a senior executive delivering a keynote address. Wen Tong, based in Ottawa, is Global CTO for Huawei Wireless and he is speaking on Monday, June 7.

Huawei Technologies has quickly become the world’s second largest telecom-equipment provider and Canada represents an important beach head for its North American market presence. Huawei was recently named the fifth most innovative company in the world for 2010, behind only Facebook, Amazon, Apple, and Google. It is an interesting list – I am interested in your comments.