I was struck by a story on CNN saying “Texas has declared open season on Facebook, Twitter and YouTube with censorship law”.

It wasn’t that Texas has introduced legislation that impacts the technology giants; Canada has a series of legislative proposals being considered to control online content. Indeed, we are seeing a wide variety of democracies around the world place restrictions or consider legislation to rein in, tax, and impose limits on some of the freedoms under which internet applications operated.

At the core of Texas House Bill 20 is a section examining discourse on social media platforms:

(a) A social media platform may not censor a user, a user’s expression, or a user’s ability to receive the expression of another person based on:

1. the viewpoint of the user or another person;
2. the viewpoint represented in the user’s expression or another person’s expression; or
3. a user’s geographic location in this state or any part of this state.

The term “censor” is defined in the legislation as “to block, ban, remove, deplatform, demonetize, de-boost, restrict, deny equal access or visibility to, or otherwise discriminate against expression”

I understand the intent behind the law. Whether true or not, many conservative voices believe their views are unfairly targeted by platforms.

I was more disturbed by a failure to understand the technology and an apparent lack of consideration of the potential unintended consequences arising from the law. For example, if a social media platform may not “censor a user”, what does that mean for efforts to limit spam-bots on social media feeds?

As described by CNN, “in oral arguments at the Fifth Circuit Court of Appeals, a three-judge panel confused social media platforms with internet service providers; disputed that Facebook and Twitter are websites; and expressed surprise that a service such as Twitter could “just decide” what content appears on its platform as a matter of course.”

The preamble of the bill says “social media platforms function as common carriers, are affected with a public interest, are central public forums for public debate, and have enjoyed governmental support in the United States”. What are the implications of such a definition?

While other commentators will certainly discuss the legislation and its further legal challenges, I’d like to look at how legislators and judges get so confused by some basic technology concepts.

It’s actually quite understandable. It’s impossible for them to be experts on every segment of the economy. They need to rely on advice from advisors. In most cases, legislation is drafted with the assistance of subject matter experts.

Sometimes, polemics from activist campaigns can overwhelm the filters of legislative debate. Clicktivist campaigns, based on barely a passing fidelity to the truth, can drive misinformation among legislators. A recent campaign from Canada’s OpenMedia organization claims “The copyright extension would block the works of dozens of established authors including Marshall McLuhan, Gabrielle Roy, and Margaret Laurence. Their works would be buried for generations.”

Extending copyright doesn’t block or bury any of these works. The campaign is simply not true.

Committee appearances by academics are also not immune from deeply flawed understandings of complex business, regulatory, and technology issues. Academics and legislators alike continue to be unaware that foreign ownership of telecommunications was liberalized a decade ago. A number of academics have confused “EBITDA” (Earnings Before Interest, Tax, Depreciation and Amortization) with “Profit”, and that has found its way into some legislative committee discussions, not recognizing that in capital intensive businesses, such as facilities-based telecommunications carriers, the interest, depreciation, and amortization amounts are substantial and require strong EBITDA to support continued investment.

Ten weeks ago, I wrote about misunderstandings and disinformation impacting debates of Parliament Committees in “Truthiness and Canada’s Telecom Industry” and I have published a few blog posts [such as here, here, and here] trying to dispel common myths surrounding Canada’s telecommunications industry.

I have written before that “Sometimes it’s easiest to simply respond to the loudest voices. There are lots of instances where we see government bodies respond to groups, large and small, making lots of noise.”

It’s even more important to ensure polemics don’t infect legislators abilities to filter fact from fiction.

Why would some people subscribe to a 25 Mbps broadband service if you could pay just a few dollars more to get a 50 Mbps service?

The answer is “Choice.”

People get to choose how they spend their money.

Phrased this way, most of you understand the options. However, I sometimes find that there are people who may have trouble empathizing with other people’s priorities, imposing their own selection criteria and preferences on others.

For some people involved in telecom policy issues, there is a belief that if the price of broadband was lowered across the board, then everyone would choose to subscribe to faster service. Taken to an extreme, let’s say prices were cut by 80% – people paying $75 per month for 150 Mbps service would have that broadband speed for just $15.

Under such circumstances, why would a lower speed option make any sense?

Choice.

Not everyone needs 150 Mbps service, so shouldn’t there be an even lower price option for them? In the extreme example, shouldn’t there be a slower speed option available for $10?

Mathematically speaking, if a 150 Mbps unlimited service can be offered for some arbitrary price point – let’s call that $P – then presumably, a lesser service (either lower speed or lower monthly capacity) should be priced at some amount less than $P. Shouldn’t consumers have the ability to make a choice to save money if they believe the higher price service is more than they need?

The CRTC’s basic service objective is for all Canadians to have access to a broadband service with at least 50 Mbps download speed, at least 10 Mbps upload, and unlimited monthly capacity. The key phrase in that sentence is “for all Canadians to have access”, not for all Canadians to subscribe to such a service.

We don’t have 150 Mbps service available for $15, and it is highly unlikely that we will see such prices. But, I am trying to demonstrate why the CRTC’s broadband objective sets a target for universal access to 50/10 speeds, not for everyone to subscribe to such a service.

The broadband service objective is one of the most misunderstood and misquoted CRTC policies that I have seen. Academic reports across the country have cited the basic service objective incorrectly, and those reports led Toronto’s Chief Technology Officer to mistakenly report to the City’s Executive Committee that there are infrastructure gaps in one of the world’s best connected cities.

There is nothing wrong with the fact that some people choose to subscribe to a service with lower speeds than the CRTC’s objective. No matter what the price is for 50/10 broadband, some people will wonder why they can’t pay some amount less for a slightly lower speed service that still meets their needs.

It is a matter of choice, and such choices are worth preserving.

Our focus should be on connecting those who don’t have access at any speed. That requires development of a digital literacy strategy, demonstrating the value of safely connecting online.

As I have said before, “Some technology problems just might be handled better without more technology.”

Size matters. When it comes to paying cost awards for public interest groups participating in telecommunications regulatory proceedings, allocations are generally based on relative size of the companies’ telecommunications operating revenues (TORs).

A recent series of cost awards associated with Telecom and Broadcasting Decision CRTC 2022-28, “When and how communications service providers must provide paper bills”, attracted a number of cost applications that were awarded $53,646.72 as follows:

• Telecom Order CRTC 2022-33: $2,015.00 to the Canadian National Society of the Deaf-Blind
• Telecom Order CRTC 2022-34: $15,463.97 to the CNIB Foundation
• Telecom Order CRTC 2022-35: $3,080.00 to the Canadian Association of the Deaf
• Telecom Order CRTC 2022-36: $4,338.00 to the Deaf Wireless Canada Consultative Committee
• Telecom Order CRTC 2022-37: $6,345.00 to l’Union des consommateurs
• Telecom Order CRTC 2022-38: $1,527.50 to Deafness Advocacy Association Nova Scotia
• Telecom Order CRTC 2022-39: $10,761.15 to PIAC-NPF
• Telecom Order CRTC 2022-40: $2,221.72 to the Consumers Council of Canada
• Telecom Order CRTC 2022-41: $7,894.38 to the Manitoba Coalition

As a matter of practice, the CRTC doesn’t allocate amounts less that $1000 in order to simplify cheque processing and collections for both the recipient and the payor. As a result, despite the possibility of allocating costs between Bell, Eastlink, Distributel, Videotron, Rogers, SaskTel, Shaw, TekSavvy, TELUS, and Xplornet, the formula used by the CRTC resulted in costs being charged just to Bell, Rogers and TELUS.

Rogers has filed an appeal of the awards [zip, 1.8 MB], questioning the CRTC on the correctness of the revenues used to determine the allocations between the companies footing the bills.

The total amounts under dispute are not huge, relative to some files we have seen, such as nearly half a million dollars sought by various groups in the 2008 internet traffic management proceeding.

Rogers is wondering what the CRTC used as the basis for its allocations. Did the Commission use wireless revenues or total revenues? Did the regulator include the revenues from all the related companies and subsidiaries on behalf of which Bell responded?

Rogers says it is paying the awarded amounts in the meantime to ensure the public interest groups aren’t caught without funding in the interim, saying that it will collect reimbursement from the other service providers, should the CRTC rule in its favour.

A similar issue arose a couple years ago when TELUS challenged cost award allocations in a proceeding that led to Telecom Decision CRTC 2020-33.

As you will recall, I have expressed concerns about some past recipients of funding. It is good to see the level of attention to detail being paid to relatively small amounts of money in these cost awards.

We have seen the expression “sustainable competition” used frequently in Canadian telecommunications policy circles.

In its rejection of an appeal on the CRTC’s Review of Wireless Services, just last month Cabinet said: “the Governor in Council considers that the Commission’s decision appropriately balances investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers”.

The terms “sustainable” and variations like “sustainability” appear 29 times in that CRTC decision.

Which brings us to the Competition Bureau filing with the Competition Tribunal to block the merger of Rogers and Shaw.

As reported by Bloomberg, the application is somewhat “baffling”. According to the Bureau, the merger “is likely to prevent or lessen competition substantially in Wireless Services in Ontario, Alberta and British Columbia.” Further, the Bureau says “divestitures proposed by the merging parties are not likely to alleviate the substantial prevention or lessening of competition from the Proposed Transaction.”

What causes many analysts to scratch our heads is an implicit presumption in the Bureau’s arguments that ending the merger will result in Shaw continuing to invest in operating its wireless business.

The lede in the Bloomberg story captures the issue. “The antitrust case against Rogers Communications Inc.’s takeover of a rival is thousands of pages long but comes down to one core idea: the company it’s buying is too good. Analysts don’t see it that way.”

Effectively, the Competition Bureau appears to be saying that Shaw would never be allowed to sell Freedom Mobile, because there are synergies with Shaw’s wireline business, even though the mobile business wasn’t originally integrated with a wireline company when it launched or when Shaw bought it. That seems pretty extreme. Earlier this week, BMO Capital wrote “We believe an outright rejection of this deal would not satisfy the government’s position of a four-player market (i.e., Shaw will not keep funding wireless, that’s why they sold)”.

The Bloomberg article notes “while Freedom may be a tough competitor, analysts question how healthy it really is. Shaw is struggling to generate much cash flow from it.”

As I wrote on Monday, Brad Shaw told the Parliamentary Industry Committee that the status quo is not an option, as the level of investment required for wireless was beyond the ability of Shaw to undertake. While the Competition Bureau may be correct in saying that Freedom contributed to competition in the wireless market, it does not say how Freedom can sustain its past level of competition if the merger is blocked. Shaw has clearly concluded that it cannot.

This is not a unique occurrence. Market consolidation has been happening, or is under discussion, in the U.S., Europe, the UK, Asia and Australia. One of the reasons for consolidation is that remaining competitive is an expensive proposition. GSMA estimates that the deployment and ongoing costs of 5G will be up to 71% more expensive than previous network generations. If Freedom is to remain a competitive force, additional financial resources are required.

Blocking the merger does not maintain Freedom’s contribution to competition in the marketplace; it weakens it.

New investors have apparently stepped up, enabling the “merging parties” to propose a divestiture. The multi-billion dollar purchase price being reported in the media implies that these potential buyers have developed business plans that are attractive to their investors and are willing to undertake the investments necessary to compete.

The outcome of the merger review process, like the CRTC and Cabinet reviews of wireless services, needs to “balance investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers.”

The Competition Bureau’s position disrupts that balance, risking the long-term sustainability of all market participants.

Circumstances shift over time, and telecommunications technology, policy and regulations are no different.

A recent set of CRTC filings provides an opportunity to take another look at the processes for changing the regulatory landscape.

A year ago, in “Channels of appeal”, I described the three normal ways to appeal a CRTC decision: to Cabinet (the Governor in Council); to the Federal Court of Appeal; or, back to the CRTC itself.

These processes have prescribed timetables set out in the Telecom Act or the CRTC’s Rules of Practice and Procedure.

But what do you do if you believe an older decision is past its “best before” date and the channels of appeal have long since expired?

That question has come up in the context of a TELUS filing, “Application requesting that SILECs be classified as Originating Network Providers for NG9-1-1” [zip, 820KB]. I’m not going to look at the substance of the application or its merits. For the purpose of today’s post, it is sufficient to know that this is a new application, dated April 21, 2022, asking the Commission to modify determinations made five years ago, in 2017.

The Independent Telecommunications Providers Association (ITPA) filed an entertaining reply that seems to suggest that there is no process available to challenge older CRTC rulings.

In its reply [download pdf, 170 KB], ITPA asserts that when TELUS argues in its application that the Commission “erred”, then its application became an appeal subject to the channels of appeal and the timetables set out in the legislation. ITPA says “waiting almost five years after the decision or order because one dislikes the effects of the decision or order is not among the choices.”

Regardless of how TELUS chooses to qualify its application, it does not make it a “new application”. Calling an apple an orange does not make the apple an orange.

I thought it would be obvious that there must be ways to change regulations after the 90 day statutory appeal process expires. Technology changes, circumstances change, the rest of the world evolves. It is inconceivable that the rules of procedure would not contemplate such a need.

And indeed, they do. In Telecom Information Bulletin CRTC 2011-214: Revised guidelines for review and vary applications, the CRTC describes the processes. Interestingly, that guideline reference is cited in the ITPA reply where the Association argues that TELUS is almost 5 years too late to file a review and vary application.

The point is, TELUS did not file a review and vary application. TELUS must have read the second half of the Information Bulletin where the Commission described “Criteria for distinguishing review and vary applications from new applications.”

In the past, some applications have been framed as new applications when they should have been framed as review and vary applications, and vice versa. The delineation of general guidelines for distinguishing among the various applications should assist applicants in determining whether to proceed by way of a new application or a review and vary application and avoid unnecessary delays.
…
The Commission has identified five factors that, although not exhaustive, will assist in assessing whether an application raises an issue relating to the original or the continuing correctness of the decision in question and accordingly, whether it should be treated as a review and vary application or a new application. These factors are the following:

• whether the application raises an error of law, jurisdiction, or fact;
• the extent to which the issues raised in the application were central to the original decision;
• the extent to which the facts or circumstances relied upon in the application were relied upon in the original decision;
• the length of time since the original decision; and
• whether the resulting decision would supersede the original decision in a prospective manner as opposed to curing an error on a retrospective basis.

We can’t have a situation where any application seeking a change is deemed to be a “review and vary”, but then the filing is thrown out for being too late. The CRTC’s guidelines accommodate such circumstances by indicating that a new application should be used.

The regulatory landscape needs to be able to evolve and the rules of procedure accommodate these shifting sands.

I think we are going to find that the CRTC will agree that TELUS properly formulated its filing as a new application.

Class dismissed.