Last week, a report was released about Canada’s top performing research companies and sectors.

According to RE$EARCH Infosource, Canada’s telecommunications sector again leads the pack, with 2008 research spending on telecom products and services representing 40% of total industrial R&D.; Of the top 100 R&D; performers, 15 were from the telecom sector, including number 1 ranked Nortel at $1.7B and number 2 BCE at just under $1B.

In 2008, Nortel spent more on R&D; than Bell and number 3 Magna combined. There are serious implications for Canada’s knowledge economy. Next year’s report will likely see the pharmaceutical sector replace telecom products as the leading performer of R&D; in Canada.

The analysis [ pdf, 111KB] from RE$EARCH Infosource is worth reviewing.

The full effect of the deteriorating world economy will be reflected in next year’s Fiscal 2009 corporate R&D; spending results. It is hard to envisage better overall performance than in 2008. For one thing, it appears that Canada’s perpetual R&D; spending leader (Nortel Networks) will be absent from the list in 2009. In consequence, total corporate R&D; spending will undoubtedly be affected – in a downward direction.

There is little doubt that total corporate R&D; spending will be dropping in the 2009 report, but there may be a more fundamental shift at play as well.

What is happening to the Nortel people and their jobs?

Although many of the researchers from Nortel may find employment with the acquiring companies [such as Ericsson’s expected doubling of its R&D; efforts], others have started their own firms or found a home with a smaller company.

There is a lot of R&D; activity among home-based entrepreneurs, some of whom have little knowledge of or interest in government SRED tax credits.

RE$EARCH Infosource offers a dozen recommendations to boost research and innovation. I’m not sure I agree with all of them, but this is an important issue to be more prominent on the national agenda.

More than just tax credits and grant programs, we need to invest in the development of multi-disciplinary education programs.

We should make sure that ICT education includes opportunities to develop skills associated with entrepreneurship, understanding enough about safeguarding intellectual property rights, business, accounting and export literacy, among other areas.

It seems to me that we need to be concerned with more than just incubating the next Nortel or Newbridge or RIM. How do we ensure that we have the right environment to foster hundreds of small, nimble innovators?

A recent commentary was written by Angel Gurría, the Secretary General of the OECD, citing a need for statistics to give a more accurate picture of society and the economy.

As Mr. Gurría wrote in European Voice:

We need tools to measure what is going on in our society – where we are progressing, where we are failing and what are the consequences of our actions. There is nothing wrong with the quality of the indicators, but some of them are not looking at what matters.
…
Statistics are not an end in themselves. Their importance lies in the policy discussions they stimulate as much as the evidence they provide.

I agree. We have to get the numbers right to empower intelligent policy discussions.

In last month, we saw university logos applied to papers, statements and ideological manifestos, giving credence to data analysis that would have trouble holding up to serious scrutiny in peer-reviewed journals of academic research.

A jewel from a recent broadband study would raise the eyebrows of any reasonable statistician reviewer:

Speedtest data is not perfect, but it offers an enormous database of actual tests, which provide insight into the speeds users experience on their computers. The dataset we analyzed included about 41 million actual tests from the OECD countries, from the fourth quarter of 2008.

Translation? Even though the source data smells funny, there’s so much of it that maybe we can find something useful. Perhaps. But we’re not convinced that the correct conclusions were drawn.

There is much more wrong with these reports, as Suzanne Blackwell and others wrote a few weeks ago. The Harvard study penalized Canada for OECD sampling errors (that I walked you through), such as ignoring Quebec as being part of the country. And as I wrote a couple weeks ago, the folks at Harvard tell us on one page that Canada had no 35 Mbps services and then 3 pages later, oops – they discovered one! Just not in time to use in their rankings. A rebuttal published on Wednesday by the study author did not address this mistake that resulted in erroneously ranking Canada as 30th for these very high speed services. Since the Harvard study also used flawed OECD sampling, this error was doubled in unfairly scoring Canada.

No matter how many studies adopt flawed speed and pricing survey data, the source just won’t smell any better. By wrapping it up with impressive academic logos, the data might have taken on a better appearance – just don’t get too close and be sure to wash your hands after touching it.

On Monday, a remarkable letter [ pdf, 71KB] was filed with the FCC.

Of particular note was the signature line – 6 leading academics who describe themselves as “professors of law who have spent many years devoted to research on the architecture of the Internet and its related policies.”

• Jack Balkin, Yale
• John Blevins, South Texas College of Law
• Jim Chen, University of Louisville
• Larry Lessig, Harvard
• Barbara van Schewick, Stanford
• Tim Wu, Columbia

In their letter, the authors note that several have testified or filed comments with the FCC, and they have published widely on the topic of Network Neutrality and related internet issues. Why did they collaborate on this special letter?

We submit this extraordinary early letter only to flag what we believe are two ambiguities in the Notice that we hope can be addressed early to provide a clearer foundation for comments.

The ambiguities are “Defining Non-Discrimination” and “Reasonable Network Management.”

Regarding the second point, these distinguished professors of law ask if the FCC is asking for comment on what the standard should be, or proposing no clear standard at all? The letter suggests that the FCC should consider the distinction used by the CRTC in defining certain tests for an acceptable internet traffic management practice.

These US law professors seem to be squarely at odds with the statement by the NDP’s critic, Charlie Angus:

South of the border, the FCC has taken clear steps toward the establishment of internet neutrality on U.S. networks.

The professors say that the FCC’s statement is ambiguous and they point north of the border for clarity. Who should we believe?

On Monday, the same day that the academics cited the CRTC’s approach, CAIP issued another press release that said:

Despite putting in place proceedings that appear like they are progressive thinkers, the Commission has been issuing regressive decisions related to competitive issues.

Both press releases from CAIP play loosely with language, saying that the CRTC’s approach was calling for “higher prices for Internet services” to deal with growing demand.

The letter to the FCC from the US internet law professors seems to contradict CAIP’s assertions that the CRTC’s decisions are regressive.

We stand by our observation that Canada is a leader in setting out the world’s first clearly defined framework for managing internet traffic.

A study [ pdf, 368KB] by a New Zealand policy research firm is calling into question billions of dollars of government stimulus for upgrading broadband connections to fibre.

In a paper called The Need for Speed: Impacts of Internet Connectivity on Firm Productivity, researchers at Motu Economic and Policy Research claim to provide the first firm-level estimates of the degree of productivity gains sourced from upgraded internet access.

We use a large New Zealand micro-survey of firms linked to unit record firm financial data to determine the impact that differing types of internet access have on firm productivity. … Having matched firms, we examine the productivity impacts that arise when a firm adopts different types (speeds) of internet connectivity. Broadband adoption is found to boost productivity but we find no productivity differences across broadband type.

Translation? The study finds a productivity benefit associated with a firm being connected to an ‘always on’ internet connection, but it could not show a benefit associated with higher speeds.

The implication? Billions of dollars are being spent by some governments on a belief that upgraded infrastructure is necessary to improve national economic productivity. Some governments, perhaps impatient with the pace of natural evolution of network development, are imposing structural separation or even nationalization of access infrastructure.

This study appears to affirm the benefit of ensuring universal access to a broadband connection; the challenge is in demonstrating a benefit from government intervention in broadband network upgrades.

If the Motu study is really the first to study the impact of broadband upgrades, one would hope that a fraction of the billions of tax dollars being spent around the world will fund econometric research to make sure that it is a worthwhile investment.

The Globalive ownership Decision from the CRTC may have an error.

Frequently, the expression ‘regulatory symmetry’ refers to the even handed application of regulations across various technologies or industries.

In today’s context, I use the expression in its literary sense.

Last Thursday’s CRTC Decision that reviewed Globalive’s ownership was complex: 119 paragraphs, organized under about a dozen level 1 headings and a few of those sections had sub-sections.

It is a well organized and readable piece – and for those who are willing to take the time, the decision lays out the difficult arguments and issues that were considered by the Commission in reaching its conclusion.

The literary symmetry that I want to refer to is in paragraph 115 of the Decision. The language in the decision reads:

Globalive has made numerous significant changes to its corporate structure and documents in order to address many of the Commission’s concerns. In this decision, the Commission has identified additional changes that are necessary to address certain remaining concerns with respect to Orascom’s influence over Globalive. These changes relate to the composition of the boards of directors, liquidity rights, and the threshold for veto rights.

However, if you look through the body of the Decision, you will see that the term “should” shows up in paragraphs 45, 64 and 72. These are the final paragraphs in sub-sections titled: “Composition of the boards of directors”; “Eligible Purchasers”; and, “Veto rights”.

Contrast these three items with the last sentence in paragraph 115. That paragraph, quoted above, indeed refers to 3 changes being necessary, but the second item listed in paragraph 115 says “liquidity rights”, not “eligible purchasers”.

In fact, there is a section called “liquidity rights”, but paragraph 59 in that section simply observes that this is an “an indication of Orascom’s influence” without suggesting that a remedy is required (such as the use of the word “should” which appears in the other paragraphs). As such, the last sentence in paragraph 115 appears to have had a literary asymmetry – a dissonance that doesn’t align the concluding paragraphs with the body of the decision.

This is what leads me to believe that an erratum is needed to clarifies the summary and restores a kind of talmudic balance.

Like straightening out a painting on a wall – did that dissonance bother anyone else?

More importantly, does that dissonance lead to confusion on what is required of Globalive to cure the CRTC’s foreign control concerns?