Two months ago, I wrote “Increasingly Stringent Regulatory Measures”, describing how the CRTC was indirectly exercising authority over the owners of an apartment building in Saint John, New Brunswick, in order to ensure residents would have a choice of communications service providers. Although the CRTC has regulations that impact decisions made by building owners, Such firms are not really directly regulated by the Commission. In that particular case, the CRTC threatened to tighten the screws on other communications companies who are providing service within the particular building.

• Within 15 days following the date of this decision, Bell Canada and any other LEC or carrier ISP already in Telegraph Square will not be permitted to provide services to any new resident of Telegraph Square and will not be permitted to provide services to a current resident that is not an existing customer of the applicable service provider.
• Within 30 days following the date of this decision, any LEC or carrier ISP present in Telegraph Square will not be permitted to modify or upgrade the services being provided to a current resident.
• Within 45 days following the date of this decision, the Commission will explore all regulatory options available to it, including issuing an order under section 42 of the Act and issuing a decision which could result in all LECs and carrier ISPs present in Telegraph Square not being permitted to provide any services to the residents.

A new case has arisen in downtown Toronto. In this particular instance, Rogers has provided services to some residents of the building at 70 Yorkville since 1984, but has not been able to gain access to the building to service customers for the past 18 months, despite repeated requests, because the building manager says there is no access agreement in place. Rogers says that it has tried to negotiate an agreement but the property manager refuses to answer.

In the meantime, Rogers says that its inability to access its equipment means service is continuing to degrade for its 10 customers in that building as well as for commercial and residential customers in adjacent buildings.

The CRTC has sent a letter to 36 different telecommunications service providers to try to determine if any of them are providing services to tenants in the building.

My brother once told me that in his first litigation class in law school, the professor said that when people come into the office and say “it isn’t the money, its the principle of the thing”, a good lawyer will recognize that it really is about the money.

The CRTC’s rules require building owners to provide access to communications service providers on reasonable terms and conditions, in order to be able to install, maintain and repair their equipment and services.

Will the CRTC apply similar indirect tools such as the increasingly stringent measures used in February? Do these 2 recent cases indicate an emerging trend among property owners and managers?

As Canada’s expert advisory group on online safety prepares to take the “next step in developing legislation to address harmful online content”, former US President Obama delivered an address at Stanford University that is relevant for those deliberations.

Obama was the keynote speaker at a symposium on April 21, “Challenges to Democracy in the Digital Information Realm”.

Among highlights in the 1-hour address, the former president referred to a weakening of democratic institutions around the world, attributed to “the profound change that’s taken place in how we communicate and consume information.”

For more and more of us, search and social media platforms aren’t just our window into the internet. They serve as our primary source of news and information. No one tells us that the window is blurry, subject to unseen distortions, and subtle manipulations. All we see is a constant feed of content where useful, factual information, and happy diversions (and cat videos) flow alongside lies, conspiracy theories, junk science, quackery, white supremacist racist cracks, misogynist screeds. Over time, we lose our capacity to distinguish between fact, opinion, and wholesale fiction. Or maybe we just stop caring.

“Like all advances in technology, this progress has had unintended consequences… in this case, we see that our new information ecosystem is turbo-charging some of humanity’s worst impulses.”

Obama said tech platforms need to accept their “unique role” in how information is consumed, referencing business models that, by design, encourage inflammatory and polarizing content to increase engagement. He said “the veil of anonymity that platforms provide their users” contribute to difficulties in determining the quality of information being consumed.

His speech also touched on the decline of traditional sources of information that maintain “the highest standards of journalistic integrity,” talking about more and more ad revenue [flowing] to the platforms that disseminate the news, rather than that money going to the newsrooms that report it”.

Obama endorsed the Platform Accountability and Transparency Act, that would require social media companies to share certain data and permit vetting by independent researchers.

He supports reforms Section 230 of the Communications Act, a law that shields platforms from legal liability for content posted on their sites.

According to Obama, “Do we allow our democracy to wither, or do we make it better? That is the choice.”

An opposing viewpoint can be found in a post by Dr. Mark Jamison, director of the Public Utility Research Center at University of Florida’s Warrington College of Business. “The answer to bad information isn’t a greater information gatekeeper role for government, but more voices.”

“Obama is wrong that government regulation of what people see would promote democracy or, more specifically, promote freedom. Such controls have done the opposite throughout history and would this time, too.”

A report in the Globe and Mail has people speculating on the possibility of Xplornet taking over Freedom Mobile as part of the process to get the Rogers-Shaw transaction approved.

If the report is accurate, it might bring an interesting and fresh approach to Canada’s wireless marketplace and one that brings benefits to rural Canadians as well.

Let’s keep in mind that from the outset, Shaw has said that it was unwilling to continue to make the necessary investments in Freedom Mobile to keep the business current. Shaw acquired Freedom after the business failed under its previous ownership.

One might ask why any acquirer would expect a different result, if it plans to continue to operate a status quo business model? Simply operating as a low-price urban mobile provider has not proven to be sustainable. There is no reason to expect different results by applying the same approach as we have seen from the original incarnations of WIND Mobile, Mobilicity, or Public Mobile.

With Xplornet, one might envision how substantially enhanced spectrum holdings could benefit the company’s rural broadband business, unlocking hundreds of millions of dollars of value from spectrum assets that are currently being squandered by Freedom. In and of itself, that would improve the financials for the Freedom Mobile business, as well as Xplornet’s core fixed broadband business, enabling more rural customers to be transitioned off satellite-based services.

Noting that Xplornet has already deployed 5G already for fixed wireless, one would expect substantial improvement in the quality of service offered to rural broadband customers, as well as the ability to dramatically extend the reach of broadband, meeting and exceeding the national service objective.

Such a deal would also improves the position of Xplore Mobile operating in Manitoba, allowing the business to be integrated with Freedom’s operations in British Columbia, Alberta and Ontario.

In Star Trek II: The Wrath of Khan, then cadet James Kirk faced with an no-win scenario in a Star Fleet academy simulation. He found a way around the test by reprogramming the system, thus changing the conditions of the contest. In doing so, Kirk defeated the Kobayashi Maru scenario, and went on to fame as a Starfleet captain. Doing the same thing over and over again and expecting different results isn’t a sustainable approach.

The speculation of a deal with Xplornet changes the conditions of the fourth carrier marketplace. It is an interesting approach to disrupt the status quo.

It isn’t easy to get suspended from Twitter or Facebook.

More than a decade ago, I referred to it as “anti-social media”. I commented at the time that “Adherence to truth and reasoned thinking is clearly not a prerequisite for publishing on Twitter.”

You need to be pretty blatant in violating Twitter’s lenient terms of service.

Indeed, it is precisely the lax enforcement of terms of service standards that has led so many countries to be examining or enacting legislation to combat online hate. On March 30, Canada’s Heritage Minister, together with the Minister of Justice and Attorney General jointly announced the appointment of “a new expert advisory group on online safety as the next step in developing legislation to address harmful online content.”

“The Government of Canada is committed to a digital society that creates safe and respectful spaces online and protects Canadians’ freedom of expression.”

The Department of Canadian Heritage also has funded an Anti-Racism Action Program, funding projects aligned with one or more of 3 themes: Employment; Justice; and, Social participation. “The Anti-Racism Action Program will also prioritize projects that target online hate and promote digital literacy.”

So, given the Government’s commitment to a “safe and respectful spaces online”, and the Action Program’s priority of projects targeting online hate, I was surprised to see that the Anti-Racism Action Program was apparently funding a series of programs across the country organized in part by CMAC consultant Laith Marouf, whose @LaithMarouf account was suspended by Twitter for violating its rules against hateful conduct.

Although his notice from Twitter explicitly forbade evasion of the suspension by creating new accounts, he has been spreading his venomous messages under a new Twitter account, @Laith_Marouf.

Was sufficient due diligence performed when Heritage officials were reviewing this funding request? [If his name sounds familiar, recall that I wrote about him last summer.]

Should the Government of Canada be funding (directly or indirectly) purveyors of hate?

Should Canada’s imprimatur be attached to this series of programs?

“Should Canada approach internet regulation with a greater sense of humility? Do such policies sufficiently consider whether they are imposing or relaxing barriers to innovation and investment?”

Those were questions I asked a year and a half ago in “Cross subsidies in a competitive marketplace”, when the previous government looked at the first iteration of its new media legislation.

Currently, Parliament has two pieces of digital economy legislation before it:

1. Bill C-11 is “An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts”, otherwise known as the “Online Streaming Act” [First Reading].
2. Bill C-18 is “An Act respecting online communications platforms that make news content available to persons in Canada”, otherwise known as the “Online News Act” [First Reading].

In reading the Acts, we find legal linguistic gymnastics, attempting to define what groups pay into various funds and what kind of groups are able to benefit from these pools. For example, The Online Streaming Act summary starts off with

This enactment amends the Broadcasting Act to, among other things,
(a) add online undertakings — undertakings for the transmission or retransmission of programs over the Internet — as a distinct class of broadcasting undertakings;
(b) specify that the Act does not apply in respect of programs uploaded to an online undertaking that provides a social media service by a user of the service, unless the programs are prescribed by regulation;
…

Got that? Streaming includes certain things, but excludes other things, unless those other things are included.

The term “social media service” appears 8 times in the body of the legislation, but I found it interesting that the term is not defined.

Both Acts refer to a sense of fairness in contributing to Canadian in a digital economy. In the Online News Act, the Summary opens with “This enactment regulates digital news intermediaries to enhance fairness in the Canadian digital news marketplace and contribute to its sustainability.”

Why is the government regulating certain internet services, news agencies, and distributors?

It’s all about money. And it’s the wrong approach.

Through the weekend, writing in the Globe and Mail about Bills C-11 and C-18, Andrew Coyne said, “This elaborate sham is intended to apply a veneer of due process to what is in fact nothing more than a crude revenue grab.”

For decades, successive Canadian governments have funded certain social objectives “off the books”, without touching the federal treasury. Canadian content production is funded by broadcast distribution companies; local phone service was subsidized by long distance calling; residential phone service was subsidized by business; rural phone service subsidized by urban.

As I wrote a year and a half ago,

The government has long used the communications sector as an alternate tax and wealth redistribution system, with fees from urban phone subscribers subsidizing rural, business subsidizing residential, broadcasting subsidizing content production. In a monopoly era, there was little harm and great political benefit. Social objectives could be attained without impact on the government budget. Politicians could take credit for achieving goals with others footing the bill. Inflated communications bills could be blamed on the industry.

As monopolies were replaced by competitive markets, artificially inflated prices got arbitraged, leading to a collapse in the funding of these programs. In 2014, I wrote “The future of communications cross-subsidies”, expressing concern about the unsustainability of the system.

As end users transfer from legacy, subsidy-paying services to applications and service providers that are outside the system, the burden increases for those who remain. As the burden gets spread across a shrinking base of users remaining, the taxation rate can increase, creating even greater opportunities for arbitrage, unless there are changes to the funds being drawn.

There are some who question whether the Canadian creative community or news agencies should receive government funding. I’m not going to wade into that area of policy. [See the piece by Howard Law on Cartt.ca for an interesting perspective.]

My focus is on the questions at the top of this article. Should Canada approach internet regulation with a greater sense of humility? Do we really need to create such a regulatory system to handle the issue of funding certain social objectives?

Is it overly simplistic to ask why the government isn’t simply adding these programs to the budget, and funding them out of general revenues? If there is a view that global technology companies are extracting profits from Canadians and are not being taxed sufficiently, isn’t that more of a general taxation issue?

Are we casting an overly broad regulatory net because we are perpetuating an off-the-books cross-subsidy system?

Does the legislation, and the cross-subsidy system itself, appropriately consider the potential impact on innovation and investment?

I have no problem with taxing companies if they should be taxed; and governments should fund social programs if they merit funding. But why make one dependent on the other? Isn’t it unnecessarily complex?

Can this legislative activity lead to artificial distortions in the marketplace, and government interference in places and activities government simply doesn’t belong?