I had a quick look at a 56 page slide deck issued last week by the FCC [pdf, 858KB] and I came away thinking that there are still too many people that confuse the need for more broadband with the need for basic IT. It is somewhat shameful that this is the impression left by a presentation by the communications regulator and policy maker in the US.

Don’t get me wrong. I would like to see all of us have access to symmetric 100 Mbps or Gbps connections at affordable prices – and by affordable, I also include the cost of government assistance (because I happen to pay taxes). But too many of the examples of broadband benefits that were contained in the FCC’s National Broadband Plan: National Purposes Update were less dependent on broadband and more in need of putting computers into the hands of more people first.

Take e-filing of taxes. The slide deck talks about savings of $2.50 for the government to process an electronic tax return instead of paper. This resulted in savings of more than $300M over 5 years. But filing taxes doesn’t need broadband; it needs computers. The amount of data exchanged between the home and IRS in e-filing is trivial.

I have written about this before [such as here and here]. Two years ago, I tied together the idea recently announced by the UK, to put the adoption of computers into the discussion of adoption rates for broadband:

Maybe Canada needs to look at targeting broadband subsidies based on income, regardless of where people live. There is a gap in the level of connectedness among lower income Canadians in urban markets as well. Maybe it is time to consider making PCs and broadband part of our social welfare system.

On another page of the FCC presentation, on the education front, there was a scary bullet:

16% of public community college campuses have high speed broadband v. 91% of research universities

Help me here. Is it really possible that nearly 1 in 10 “research universities” don’t have broadband? What kind of research goes on at these universities? Is it really possible in the year 2010 for a university in the United States to give degrees or apply for research grants without broadband connectivity for their researchers? I guess you can apply for grants, but what funding agency will actually give money to such a school? Either the statistic is wrong or the FCC should be concerned about the failure of university administrations at nearly 10% of the nation’s campuses to bring their basic research and education needs into the 1990’s, let alone the second decade of the 21st century.

Before the US gives another penny to upgrade broadband under the stimulus program, can someone help set some basic priorities? By the way, yesterday, the FCC released the results of a survey of about 5000 households, with the results interpretted to conclude that cost and digital literacy are the biggest impediments to increased broadband adoption in the US [press release, survey results, survey questions].

The FCC’s mandate may have been set too narrowly – to develop a national broadband plan. Nations really need to develop broader digital strategies – encompassing all aspects of ICT strategy.

The 2010 Canadian Telecom Summit will have special sessions on Tuesday, June 8 that look at International Perspectives on ICT Strategies, followed by a session looking at Building Digital Canada. Early bird rates expire this week. Have you registered yet?

The Globe and Mail’s editorial on Monday, “Canada’s Broadband Lag” refers to a new report from Harvard University’s Berkman Center. That editorial appeared the same day that I wrote about investment in broadband by all sectors of the industry. 

As my regular readers know from the numerous criticisms of the preliminary Berkman report [such as here, here and here], Berkman’s approach was flawed from the outset. The final version of this study should receive a failing grade for allowing its political agenda to interfere with a sound academic approach to contribute to understanding the state of broadband development and usage in the US and the rest of the world. That was its mandate from the FCC.

Instead, the Berkman authors discarded evidence that didn’t fit with the pre-conceived policy framework that it elected to promote.

Recall that one of our criticisms asked about the inconsistency of Videotron’s 50Mbps service. The final report mentions our criticism in a footnote. Videotron, the largest ISP in Canada’s second largest province is categorized by Harvard as a “marginal provider” and the province of Quebec is an “uncompetitive remote market.”

Among my favourite sections is where the authors appear to recognize the problems with using the OECD figures as their source, but say that there is such a rich history of data that there is value in examining the trends. Like getting compost from all the garbage, as we wrote last fall.

The Globe and Mail editorial writers may not be reading news that appears on the pages of its own business section, to check facts in its editorial.

Canada ranks with Poland, Hungary and Mexico as laggards in the availability of 3G, which allows the distribution of video content over mobile phones and to new devices such as Apple’s iPad.

The GSMA lists 17 HSPA mobile networks in the world operating at 21 Mbps. Three of them are in Canada, the only 3 in North America. 

As I wrote yesterday, there is tremendous investment in fixed networks as well. Bell Aliant has introduced fibre to the home (FTTH) in two of Atlantic Canada’s major cities. Bell has announced a large scale project for FTTH in Quebec City. Novus has launched 200Mbps FTTH-based service in Vancouver. Shaw plans to trial FTTH-based gigabit per secons service. All of Canada’s cable companies already have technical capabilities to deliver faster than 100Mbps broadband, without tearing up the streets or stringing overhead fibre.

These investments are being made by the private sector for competitive reasons, which contradicts the highly interventionist policy approach being advicated by the Berkman Center.

For Canada to win in a global digital economy, our country needs to establish our own national vision that looks beyond the often-flawed and out-of-date statistical rankings of broadband infrastructure. What we need to understand is why so many Canadian households still don’t have computers; why Canada is lagging in scientific research; and, how we should best promote the development of Canadian content and applications.

These are the more complex issues that call out for national policy leadership.

As I have mentioned over the past week, The 2010 Canadian Telecom Summit will have special sessions on Tuesday, June 8 that look at International Perspectives on ICT Strategies, followed by a session looking at Building Digital Canada. Early Bird rates for The Canadian Telecom Summit are available until the end of this week.

Have you registered yet?

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A number of recent announcements of projects to deliver ultra-high speed internet have surfaced in recent weeks, ranging from Bell’s FTTH roll-out in Quebec City, Novus 200 Mbps offering in Vancouver and Shaw planning gigabit trials in its territory.

All of these point to a climate of substantial investment driven by competition looking for differentiation by enhancing the internet speeds available to their customers.

The investments aren’t limited to just urban centres. Barrett Xplore has announced [here and here] investments in next generation high throughput satellite capacity in order to bring advanced services to rural and remote markets.

As the CRTC works through the filings in the essential services proceeding, and the deferral account implementation plans [3 files: implementation, competitor access, and consumer rebate], it needs to be cognizant of potential unintended consequences of its policies: chilling a fragile investment climate.

Competition appears to be working, with facilities based carriers driving investment in more advanced broadband facilities, delivering faster speeds to consumers. Our governments are out of money and, as I have written before, governments don’t have a great track record at maintaining and operating infrastructure.

What are the right policies to continue to provide encouragement to the private sector?

With the Olympics acting as a bit of a distraction, it took me some time to get around to reading the CRTC report, “Navigating Convergence: Charting Canadian Communications Change and Regulatory Implications.” Many of the news accounts of  the report were typically superficial, effective for looking for sensational headlines and forcing the CRTC Chair to issue a statement to respond.

One of the stories focused on so-called “skyrocketing” prices supposedly highlighted in the report. If you check out Figure 7 in the report, you will see that the prices don’t really seem to be “skyrocketing.” The overall CPI rose 13.3% from 2002 to 2008. Telecom services rose 5.7%, less than half the rate of inflation. Prices rising 5.7% over 6 years: help me understand the adjective, please. That’s a fizzled out kind of skyrocket, isn’t it?

Now, eyeballing Figure 7, you will notice that prices have been pretty flat, with an uptick in the final year. The statistician in me asks, what happened in that year? Well, followers of the CPI would know that in 2007, Statistics Canada updated the CPI, changing the base year to 2002 and it also updated the basket of goods to match consumer purchase patterns in 2005.

So the first point is that there is a discontinuity that needs to be examined and understood. Secondly, the CPI report from Statistics Canada is measuring a basket of services that does not necessarily align with current purchases. The current basket is 5 years old. An objective of the CPI is to match the goods and services that the average household buys, and adjust in order to understand like for like price changes. But certain goods and services are very different today from what was available 5 years ago.

Think about the challenge in comparing prices on computers – the purchase price may stay at $1000, but that buys a lot more of a machine today than it did in 2002. Today’s households buy a very different mix of telephone services than what they bought 6 years ago. That changing mix means prices for legacy services may have changed for all the right reasons as tastes and trends transition.

Cable and satellite rose 30% since 2002; double the CPI. Of course, let’s also be sure to take a look at what has happened to TV over that period. More channels, more digital, affordable big screen TVs (meaning more set top boxes per household), more HD, pay-per-view, on-demand, etc.

In other words, people are buying more TV services, perhaps because they want to and because they think it is worth the price, especially compared to other entertainment choices in a tough economy.

It is easy to look at numbers; it is a lot tougher to understand them, draw conclusions and develop policy based on the data.

Early bird prices expire at the end of February for The 2010 Canadian Telecom Summit. Sessions at the event will explore all of the issues affecting Canadian Telecommunications. Register today for The Canadian Telecom Summit.