Too many community networks are failing their constituents.

I’m sure there are some exceptions, but the record shows that too many of them are a drain on scarce community financial resources and have created disincentives for private sector broadband investment. In the end, such projects can delay delivery of broadband services, precisely the opposite of what should have been sought.

Recently, i-Valley, an organization claiming to be behind “Canada’s largest rural network”, issued a press release “calling on all Federal Parties to take a new approach to broadband creation”. In “Fresh Approach Needed for ‘Broadband Nation’”.

Let’s take a look at i-Valley’s signature project, a broadband network for the Municipality of Pictou County in Nova Scotia. “In 2016, Council initiated a planning process to remedy the situation by taking the future into its own hands, without waiting for outside agencies for relief.”

The municipality has allocated $11M toward construction of the first ring. Another $4.46M in federal funding has been allocated as part of the rapid response stream of the Universal Broadband Fund, connecting 3600 households.

Five years later, the future still hasn’t arrived for residents of the Municipality of Pictou County. Five years. A fresh approach is certainly needed.

Last summer, I wrote about Beaumont, Alberta (“When a smart city plan isn’t so smart”). It still hasn’t decided on whether to proceed.

The poster child for community networks in Canada, O-Net, has been pushed into receivership by the town of Olds, Alberta, for failure to repay a $14M loan.

I have written before that Community networks are hard. A year ago, Rob McCann of Clearcable Networks (and President of the Hamilton Technology Centre) asked “Have Open Access Networks Seen Their Day?” in an article in the Intelligent Community Forum.

While the Conservative Party platform says it will “Promote investment in communications facilities by local and regional communities”, it should carefully consider the history of failed local government attempts to deliver on the promise of community networks.

There are business models that can accelerate investment in broadband facilities in underserved communities.

And, there are models that squander time and tax dollars. The smarter “Smart Communities” know the difference.

Over the past two days, Rosh Hashana services have given me an opportunity to reflect on a variety of issues and, as might be expected, my mind turned to telecommunications.

Conservative leader Erin O’Toole released a policy statement on telecom on Tuesday, the first day of Rosh Hashana, saying

Canada’s Conservatives will let companies from Europe or the United States come to Canada and compete for your business. That will mean more choice and lower prices. Only Canada’s Conservatives have a plan to make cell phone and internet service more affordable for you.

Due to the holiday, I regret that it has taken a couple days to respond.

As I wrote a couple weeks ago when the platform was first released, this promise is “interesting (and perhaps a little awkward) since foreign ownership in telecom was relaxed back in 2012 under (Conservative) Prime Minister Stephen Harper”.

The Conservative backgrounder [pdf, 245KB] appears to be relying on Section 16(3) of the Telecom Act for its statement, “Currently, foreign ownership of a Canadian telecommunications company is limited to up to 20 per cent of a company’s voting shares and no more than 33.3 per cent of the voting shares of a holding company, and an effective total limit of 46.7 per cent as long as the foreign entity does not have control.”

Apparently, they read that section of the Act without reading S.16(2)(c) and S.16(6) which effectively combine to allow any company other than Rogers, Bell or TELUS to be foreign owned. So it simply isn’t true that “Canada currently bans foreign companies from competing here”, as Conservative leader Erin O’Toole said during the press conference.

The Conservative backgrounder starts off saying “A Conservative government will begin the process of allowing international telecommunications companies to provide services to Canadian customers, provided that the same treatment is reciprocated for Canadian companies in that company’s country.” A reciprocity test does not currently appear in the Telecom Act, so such a restriction would actually serve to limit the number of foreign competitors, not increase the pool.

Companies from Europe and the United States (and, for that matter, from the rest of the world) have been allowed into Canada for nearly a decade.

With new-entrant set-aside rules, these foreign competitors even had the opportunity to pick up spectrum at a substantial discount.

I have to ask, “Where are they?”

If consumer prices are really that much higher than costs, wouldn’t that have created even more of an incentive for others to enter the market?

It is good to see the Conservative platform examining the cost of spectrum, which has been identified as a significant contributor to higher carrier costs. Canadian spectrum costs have been called a hidden tax, contributing an extra 12% to our wireless bills. It appears to be a recognition that spectrum policy needs to be reviewed. It remains unclear how a promise like “A Conservative government will make investments in rural broadband and lowering prices a necessary criteria of winning spectrum auctions” would be significantly different from the current government’s tension balancing price, coverage and quality.

In the welcome letter to CRTC Chair Ian Scott four years ago, the Ministers wrote “All Canadians and Canadian businesses deserve high quality telecommunications services at affordable prices.”

They do. As I have noted many times, there is a difference between “affordable prices” and “rock-bottom prices”. And there are costs associated with expanded coverage and advanced technologies. Mr. O’Toole said at Tuesday’s media event “Canada’s Conservative will always put the interests of Canadian consumers first.”

It is important to recognize that the interests of consumers are multi-dimensional and extend beyond just price.

So, how did we get here?

A number of years ago, in “Digging ditches and digital policy”, I cited a paper from the Institute for Research in Public Policy that said “Like other countries, Canada is once again engaging actively and more openly in industrial policy. In fact, it has a profusion of industrial policies, what it lacks is a strategy.”

No clear strategy. No clear objectives. No scorecard for measuring progress.

What are we trying to accomplish? How do we measure success? As I have said many times [here and here], I would like to see us start with clear objectives: “Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.”

How do we celebrate success in digital policy, if we aren’t clear about what we are trying to do?

How do we move forward?

After the heat of the election battle has cooled down, we’ll want to watch for a clear strategy, recognizing the balance and inter-relationships between competing objectives for universal access to high quality telecommunications services at affordable prices.

It’s one thing to look at how we got to where we are; it’s something quite different to agree on where we want to go from here.

Only then can we figure out the best way to get there.

The Jewish New Year, Rosh Hashana, begins Monday evening, September 6, marking the year 5782.

This period in the calendar is a time of reflection and introspection. We review the past year, and look ahead to the next. Last year, I wrote “I hope the coming year allows a return to increased personal interactions, without masks hiding our facial expressions.”

Like many of us, I had high hopes. I have missed being able to see those members of my family who live overseas, including one who only knows us via video-chat software, and we have only seen our west coast family too briefly in June.

A year and a half after COVID-19 restrictions began, how many of us thought we would be seeing infection rates rise again? Who thought it would take a year and a half before vaccines became mandatory to enter many workplaces and schools and places of worship? That vaccine hesitancy would continue to be based on misinformation being shared and amplified on social media?

As we move toward a second year of live-streamed synagogue services, I continue to hope that you are inscribed for a year marked by good health, by personal and professional growth, and a year of peace for all of us.

לשנה טובה תכתבו ותחתמו

Two weeks ago, in “Peace, order and good government”, I wrote about what I would have liked to see in a party platform as we head into this pandemic election.

Earlier today, the Liberals finally released their “Forward. For Everyone” [pdf, 3.1MB] platform, at the midway point of this 5 week long election campaign. The Liberals and NDP released their platforms at the start of the process – and I discussed their platforms in my August 16 post.

Two years ago, the Liberal platform promised a 25% reduction in wireless prices over two years. That target was achieved, according to the Statistics Canada cellular component of the Consumer Price Index. Indeed, I argued back in early March of 2020 that the government could already “Declare victory. Consumers are winning”.

The 2021 Liberal platform does not contain much on the telecom policy front, beyond an affirmation of its commitment to drive further investment in rural broadband.

A re-elected Liberal government will:

• Require those that have purchased the rights to build broadband actually do so. With this use it or lose it approach, Canada’s large national carriers will be required to accelerate the roll-out of wireless and high-speed internet in rural and northern Canada by progressively meeting broadband access milestones between now and 2025. If these milestones are not met, we will mandate the resale of spectrum rights and reallocate that capacity to smaller, regional providers.

A couple pages later, the platform says:

With an increased reliance on the internet to access services, work remotely and attend school, rural communities in Canada have been disproportionately affected by the digital divide. Just under 50% of rural communities have access to Broadband at 50/10 Mbps and the CRTC estimates that only 30% of First Nations households have access to internet. Ensuring that companies accelerate the roll-out of their broadband projects will contribute to the economic growth of those communities and the wellbeing of Canadians.

The platform appears to be a strong signal that a Trudeau government will stick with its fundamental telecom policy statement from a year ago: “Canada’s future depends on connectivity”, setting out clearly that it favours a policy environment that encourages investment in high-quality network facilities. “Incentives for ongoing investment, particularly to foster enhanced connectivity for those who are unserved or underserved, are a critical objective of the overall policies governing telecommunications, including these wholesale rates.”

As I have written before, it is easy to call for measures that lower prices. It is more responsible to set out a policy platform that understands the balance between competition, affordability, consumer interests, investment and innovation.

The Liberal platform seems to be pointing to maintaining balance.

As we approach the mid-point of the Canadian election campaign, we are still missing the clarity of a vision statement such as that set out a year ago by Innovation Minister Navdeep Bains: “Canada’s Future Depends on Connectivity.”

Clear. Concise. Over the past year, I have referred frequently to that statement.

At the time, I observed there can be regulatory and policy levers that don’t require direct subsidies to improve the business cases for the private sector to invest in rural expansion. Policies that improve the business case for network investment go a long way toward leveraging the financial capacity and technological capabilities of telecom carriers to achieve our national connectivity objectives.

Unfortunately, we haven’t heard a lot about that kind of vision in this election campaign.

Two weeks ago, I drew your attention to an OpEd entitled “It’s time we finally closed the digital gap”.

It served as a reminder that it was just over 20 years ago, in June 2001, that the report of the National Broadband Taskforce was released, “The New National Dream: Networking the Nation for Broadband Access” [pdf, 1.5 MB]. Just over 100 pages, the report was the result of consultations chaired by then president of University of Waterloo (and future Governor General), David Johnston with panel of 33 leading telecommunications stakeholders representing a wide range of interests.

Twenty years ago, the task force sought to have broadband deployed in just over 3 years “to and within all Canadian communities”.

They were optimists.

Twenty years later, we still don’t expect the job to be complete in 3 more years.

The experience of Canada’s broadband pioneers provided an essential reality check for the Task Force. It helped immeasurably to point us in the right direction, as we sought to develop priorities and models for broadband deployment.

In light of this experience and on the basis of our analysis of the broadband requirements of Canadian communities, we recommend that by 2004, broadband facilities and services should be deployed to and within all Canadian communities, according to the following priorities.

• All Canadian communities should be linked to national broadband networks via high-capacity, scalable transport links capable of supporting an aggregate of 1.5 Mbps symmetrical service to each end user, as well as higher bandwidths to institutions.
• Access to broadband in First Nation, Inuit, rural and remote communities (including Métis communities) should be available at a reasonably comparable price to that charged in more densely populated areas.
• The local broadband access infrastructure should be extended to the community’s public facilities, including every public learning institution, public health care facility, public library and other designated public access point.
• The local broadband access infrastructure should also be extended to local business and residential users, for example, by leveraging broadband infrastructure serving public facilities.

It appears that the scale of resources required were underestimated. For example, for “Transport to unserved communities”, estimates of total required investment ranged “from $1.3 billion at the lower end to $1.9 billion at the upper end.” Another $500-600M was estimated to be required to connect public institutions and up to $2B to connect businesses and residences.

Still, many of the fundamental principles seem worthwhile to continue to hold onto:

After examining a large number of alternative approaches, we came to the conclusion that government-funded broadband deployment models should achieve the following objectives:

• ensure third-party open access;
• ensure competitive and technological neutrality;
• ensure sustainability and scalability;
• ensure transparency in all aspects of government funding programs;
• maximize the role and risk taking of the private sector;
• leverage the financial capability of the private sector;
• minimize deployment costs;
• encourage public and private sector partnerships;
• respond to community needs; and
• build community capacity.

Twenty years later, we continue to need leadership who can articulate a coherent telecom policy agenda, promoting innovation, and fostering an environment encouraging investment in telecommunications infrastructure.

Now, that would be a new national dream.