The partisan antics during the review of Bill C-11 in Canada’s Parliamentary Heritage Committee was embarrassing to watch. The bill has now passed in the House and moves to the Senate for review. Sadly, I’m not convinced the Chamber of Sober Second Thought will restore my faith in constructive democracy in action.

It is as though some of our politicians are portraying caricatures of themselves in a poorly acted dramatization of Parliamentary affairs – somewhat ironic since Bill is fundamentally for capturing more sources of funding for Canadian media production.

Two months ago, I wrote “Re-Engineering Canada’s digital legislation”, observing that successive Canadian governments have funded certain social objectives “off the books”, without touching the federal treasury. Since its inception, Canada’s communications regulator has been charged with operating a system of cross-subsidies in telecom and broadcasting, outside of the Federal budget process, such as urban phone rates subsidizing rural, broadcasters subsidizing creation of content.

As long as telecom and broadcast distribution were somewhat universal, monopoly services, what difference did it make? Sure, the subsidizing services were priced higher than necessary, but it was all in the national interest. And the public would get upset at phone companies and cable companies for over-priced services, rather than raise taxes and getting the voters upset.

But, competitive forces started to get in the way. Those services could avoid the costs of the hidden taxes and offer lower prices. As fewer households subscribe to the former monopoly services, the funding would either shrink, or rates would need to increase for the remaining subscribers. That could only lead to an bigger arbitrage spread, increasing the incentive to leave the “system”.

Unlike many opponents of the digital bills (C-11 and C-18), I don’t dispute the need to fund Canadian cultural activities and media development. However, I do have concerns about the potential for unintended consequences arising from many of the measures set out in the legislation.

Have we considered cutting the Gordian knot – boldly restructuring the system of subsidies and regulatory measures imposed on legacy businesses?

Recognizing the political risks of different priorities for different governments, why aren’t we funding these important social objectives from the federal treasury? Isn’t that properly the mandate of elected governments, not an expanded regulator operating an off-the-books tax system?

As former CRTC Chair Konrad von Finckenstein told the Senate Committee, the issue of “discoverability” is very different for online content compared to traditional broadcasting. In traditional broadcasting, we impose certain content requirements for airing during various times of the day. But the regulator can’t make people watch those programs. In the case of streaming, the viewer is in front of the screen and has made a selection to watch what they want when they want to. I suspect that offering additional Canadian choices means interfering with the services’ algorithms. But, the core message is that at the end of the day, the viewer will watch what they want to watch.

To date, there has been a measure of naivete on display on both sides of the debate, and an unwillingness to listen to opposing viewpoints, regardless of how condescendingly they may have been expressed. Perhaps we can remain optimistic that the Senate review will be more productive and enable a more complete evidentiary record to be established.

The digital economy is based on complex global forces, operating with unprecedented freedoms that promote innovation. There are certain to be unintended consequences from the proposed legislation. That is at the root of my concern.

As I have said before, shouldn’t Canada approach internet regulation with a greater sense of humility?

As I have discussed before, the government’s telecom policy priorities have been for quality, coverage and affordable prices.

Mobile prices have fallen more than the benchmark of 25% over two years set by the current government.

A new study from independent mobile analytics firm Opensignal indicates strong performance and service availability, even outside urban areas.

As a CWTA press release states, the Opensignal report “shows that mobile video, gaming, and voice app experience in cottage country is on par with the national experience.”

Opensignal reports that users in cottage country have strong network access across Canada, being connected to 4G or 5G 93.3% of the time (just 1.4% lower than the national average).

An analysis by CWTA of recent Opensignal Market Insights reports shows the average 4G download speed for Canada’s cottage country (52.9 Mpbs) is faster than the national average download speeds across all network connections for each of the other G7 countries, plus Australia.

Despite the challenges of deploying world-class mobile networks across Canada’s large geography, harsh terrain and low population density, the wireless industry continues to invest billions of dollars to expand and enhance mobile services across the country, including rural communities, as reported by Opensignal.

That investment continues to move the yardsticks ahead on the policy priorities: quality, coverage and affordable prices.

Many questions raced through my mind in the wake of the late Friday night announcement of a deal for Quebecor (Videotron) to acquire Freedom Mobile as a remedy to address Competition Bureau concerns about the Shaw – Rogers transaction.

The deal sees Quebecor pay $2.85B to acquire “all of Freedom branded wireless and Internet customers as well as all of Freedom’s infrastructure, spectrum and retail locations. It also includes a long-term undertaking by Shaw and Rogers to provide Quebecor transport services (including backhaul and backbone) and roaming services.”

Upon closing, Videotron will be a facilities-based mobile competitor in Canada’s 4 most populous provinces, covering 13 of the country’s 15 largest cities – the company will still not have a presence in Manitoba, Saskatchewan or the Atlantic provinces. Videotron will have mobile spectrum covering about 85% of Canada’s population. Of all the new entrants in Canada’s mobile market, Videotron has secured the strongest share of subscribers in its home province of Quebec.

As an aside, let me remind readers that long before CRTC Chair Ian Scott indicated a preference for facilities-based competition during an interview in May, 2021 at The Canadian Club, in its submission to the CRTC in 2019, the Competition Bureau stated as a matter of fact “All else equal, facilities-based competition is the most sustainable and effective form of competition.”

In earlier posts, I indicated that I envisioned a different outcome, spinning off Freedom to Xplornet, but it appears that the Competition Bureau was as enamored with my Kobayashi Maru scenario as Star Fleet Academy was with officer-candidate Kirk. I can handle such rejection.

What does a divestiture of Freedom Mobile to Videotron mean for competitive providers operating in other provinces? Could we see the emergence of a cooperative alliance between the “other” service providers in Saskatchewan (SaskTel), Manitoba (Xplornet), and Atlantic Canada (Eastlink)? What advantages might arise in doing so?

Competition in the Alberta marketplace will be interesting to watch. According to data from Michael Sone Associates “2021 Mobile Wireless Communications & 5G Services Market Report”, TELUS had about half of the market, Freedom had about 5% and Rogers and Bell split the remainder. Freedom has a higher share of BC and Ontario, ranging from 8% to 10%. Saskatchewan could also face some significant shifts, since Rogers is seeking to acquire Shaw’s wireline operations, and be in a position to be the first to offer full home service bundles in competition with incumbent SaskTel.

Having reached this point – announcing a deal with Quebecor – one might expect that there have already been discussions with the Competition Bureau and the Minister’s office. Will the transaction be sufficient to gain the necessary final approvals enabling these multi-billion dollar deals to close?

What branding and approach to marketing will Videotron use in its new markets? As the deal gets reduced to contractual terms, will Videotron and Rogers come to an agreement on outstanding litigation between the parties?

Will the timetable for approvals be completed in time for the new industry structure to participate in the important back-to-school marketplace?

More questions (and hopefully, even more answers) will arise in the coming weeks. Always interesting times in the Canadian telecom space!

The intersection of telecommunications policy and public safety has been failing Canadians.

There have been failures on two distinct fronts: public alerting and the development of a public safety broadband network.

As reported by Colin Freeze in the Globe and Mail, Canada has had a “direct-to-cellphone” alerting system (Alert Ready) operating since 2018, but the RCMP in Nova Scotia didn’t know how to use it.

The Alert Ready website describes the roles and responsibilities of various agencies in the delivery of public alert messages, which are transmitted to compatible mobile devices, TV and radio broadcasters and satellite and wireline broadcast distributors.

The system starts with a government-authorized user (provincial, territorial and federal government organizations, and emergency management officials) who:

• Specifies the type of alert [e.g. amber alert, tornado, etc.] as well as whether it is to be broadcast immediately because of imminent threat to life.
• Chooses the content of the message, including which language(s) the message will be issued in.
• Chooses the format of the message, including whether the message will be sent as text only, audio only or in both text and audio formats.
• Specifies why and when the alert is sent.
• Ensures that the alert is updated and/or cancelled.
• Specifies the geographical areas covered by the alert.

Given the amount of testing that the system has undergone, and the number of Amber Alerts or other alerts that many of us have received at all hours of the day and night, it seems inconceivable that anyone responsible for public safety communications would be unaware of the system.

How is it possible that management in an emergency services organization like the RCMP did not ensure training and procedures were in place? Where was leadership from the federal government?

The CRTC ensured that a working notification system was developed, and paid for it by an artificial tax on TV distributors, part of the government’s parallel tax scheme that I described 4 years ago in “A taxing situation”.

This was a failure in leadership by those responsible for public safety.

When the police receive a new vehicle, the car manufacturer may be responsible for training the police agency on how to activate the lights and how to activate the siren, where to find the hood release, how to accelerate and how to brake. But ultimately, it is up to the police to develop procedures on when it is appropriate to use these capabilities. Police car makers can build high performance vehicles, but it is up to the police to determine when it is appropriate for the police engage in a high speed chase. The vehicle has lights and sirens, but the manufacturer has nothing to do with deciding when it is appropriate to activate them. The builders of the Alert Ready system can train users on how to use the system, but cannot develop the procedures for when the system should be activated.

Last weekend, there were outages for 9-1-1 service in parts of the Yukon and all of the Northwest Territories. In some locations, 9-1-1 was reported to be available from mobile phones but not landlines. This is a standard Alert Ready type (“A 911 service alert happens when there is a disruption or outage of telecommunication services between the public and emergency responders”). Were alerts sent? If not, why?

From the beginning, I have called for reviews of the system, suggesting “Canada should have a multi-agency formal process to review each use of the National Public Alert System, to help develop best practices”. Tragically, in Nova Scotia, the agency charged with provincial policing had no awareness of the system, let alone an awareness of best practices, in a time of crisis and a truly urgent need for the public to receive notifications. No wireless alert was issued; no notification was sent to broadcasters for their retransmission.

On the second file, the development of a public safety broadband network, the government has again failed to provide leadership, squandering valuable spectrum and failing to deliver communications capabilities that every other sector of the economy takes for granted. For a decade, 20 MHz of valuable 700 MHz spectrum has been sitting unused, reserved for some mythical public safety broadband network to provide first responders with interoperable multi-media communications capabilities.

The general public has enjoyed these capabilities for years. We call it WhatsApp, or Facetime, or any number of competing apps. Need more security? The business community has a number of solutions, none of which require billions of dollars worth of spectrum and billions more to build out a network. Any other organization would be harshly criticised for not using spectrum. The public safety spectrum is idle and has been for more than 10 years. In March, “Public safety within the public network”, talking about a virtual network solution – an architecture that is used in the US with its FirstNet.

Last week, the FCC celebrated its first 10 years of wireless public alerts in the US. There is much we can learn from other jurisdictions for public alerts and for public safety networking. The first step requires recognizing we have a problem.

Le meglio è l’inimico del bene. Perfection is the enemy of the good. No system can be expected to be perfect, but surely some kind of solution is better than nothing.

The release of the Government’s proposed new Policy Direction late last month started a statutory consultation period, formally announced with the publication in the Canada Gazette. The consultation has generally proven to be a meaningful exercise, often with substantive changes reflected in the final version, as we saw in 2019, the last time Canada introduced a Policy Direction.

The proposed policy direction outlines key policy goals for Canada’s telecommunications networks, to be able to support the latest innovative applications, available to all Canadians regardless of where they live or work, and at affordable prices. These are consistent with the themes of quality, coverage and affordability, which have been the focus for the past 5 years.

The notice in the Canada Gazette includes a Regulatory Impact Analysis Statement, providing some good background information.

Other relevant documents for those participating in the consultation can be found at:

• Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy
• Backgrounder: Summary of the Government of Canada’s new proposed policy direction to CRTC
• Backgrounder: Renewing Canada’s approach to Telecommunications Policy: Context for Action

I can envision a few areas of the proposed Direction that may attract some fine tuning.

For example, I wonder if sections 10 and 11 might contain a level of technological specificity that could inhibit network evolution, contrary to the stated policy goals. Keep in mind that the Policy Direction becomes a legislative instrument that can remain in force for a long time (the proposed Direction will rescind a Policy Direction that has been in place for 16 years, since 2006).

9. In order to foster fixed Internet competition, the Commission must
   • a) maintain a regulatory framework mandating access to wholesale services for fixed Internet;
   • b) monitor the effectiveness of the framework; and
   • c) adjust the framework as necessary and in a timely manner, including by making proactive adjustments.
10. The Commission must mandate the provision of an aggregated wholesale high-speed access service until it determines that broad, sustainable and meaningful competition will persist if the service is no longer mandated.
11. The Commission must mandate the provision of wholesale high-speed access services with a variety of speeds, including low-cost options in all regions, and should not allow the discontinuance of such services if this would eliminate affordable options for consumers.

At the very least, shouldn’t we consider the appropriateness of Section 10’s lack of technology neutrality?

Perhaps the Policy Direction could achieve the same purpose by including sections 10 and 11 as subsections of Section 9, following 9a) with something along the lines of “mandate the provision of appropriate wholesale high-speed access services, with a variety of speeds, including low-cost options in all regions”; renumber b) and c) as c) and d); and, add a subsection 9e) along the lines of “not allow the discontinuance of such services if this would eliminate affordable options for consumers.”

Thoughts?

As set out in the Telecom Act:

8. The Governor in Council may, by order, issue to the Commission directions of general application on broad policy matters with respect to the Canadian telecommunications policy objectives.
   …

10. (1) The Minister shall have an order proposed to be made under section 8 published in the Canada Gazette and laid before each House of Parliament, and a reasonable opportunity shall be given to interested persons to make representations to the Minister with respect to the proposed order.

The “reasonable opportunity” for “interested persons to make representations to the Minister” runs until July 19. Comments are to cite the title of the policy direction (“Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy”) and can be sent by email to telecomsubmission-soumissiontelecom@ised-isde.gc.ca.

Comments are expected to be posted on the Spectrum Management website.

You can submit your official comments on the proposed Policy Direction by clicking here.