The latest edition of Telecom Policy included an article (“Determinants of internet use by school-age children: The challenges for Mexico during the COVID-19 pandemic” [pdf, 1.5MB]) that I found interesting. Although the study examined challenges in a developing country, I think there are lessons for us in Canada.

We often associate the challenges of universal internet with access, a supply-side issue; and with adoption, a demand-side issue. The Mexican study examines other demand-side issues and also discusses a third dimension, benefits, to examine factors impacting the utility of internet use.

I have written frequently about most governments’ focus on access, developing and funding programs to stimulate investment in infrastructure to ensure that broadband service is available universally.

As Canada moves toward addressing the second tier, we have seen industry developed programs, designed to aid with broadband affordability. However, it is important to note that the study found income isn’t the only factor impacting adoption, as operators of Canada’s low-income broadband programs can attest. As I wrote in “The broadband divide’s little secret”, lower prices aren’t enough to get people to connect.

The Mexico study found that internet access and use depends on level of schooling, economic status, digital skills, and place of residence, as well as the presence of electronic devices and infomediaries in the household. As discussed in the paper, there are “two essential factors that determine the acceptance of technology: perceived utility; and, ease of use.” As a result, the paper should encourage us to examine other factors to stimulate internet adoption, and expand the way we look at some of the typical variables.

For example, income isn’t simply a determinant of affordability of internet access services; income also influences the ability to buy goods and services over the internet, a key part of the perceived utility required for technology acceptance. Similarly, increasing digital skills capabilities helps to diversify the user’s online activities “such as electronic commerce, banking, information seeking, and interaction with the government.” The paper discusses the value of “infomediaries” defined as people who are available (preferably within the household) to facilitate internet use for those lacking the skills to do so on their own.

The study shows that use of the internet at school can be an important factor for household adoption, use, and benefits. While most of the private sector programs associated with Connecting Families targeted affordable broadband for low-income households with children, we might wonder if more can be done, perhaps integrating such programs within the school system to help develop the school kids as household infomediaries.

Can schools and school-kids help sell the utility of broadband connectivity to technology-wary parents in underserved households?

Last week, the Government of Canada released a report on “What We Heard: The Government’s proposed approach to address harmful content online”, summarizing the feedback received from its consultation last summer.

I think it is worth reproducing the “Key Takeaways and Executive Summary” in its entirety:

Key Takeaways and Executive Summary
On July 29th, 2021, the Government of Canada published a legislative and regulatory proposal to confront harmful content online for consultation on its website. Interested parties were invited to submit written comments to the Government via email.

Feedback both recognized the proposal as a foundation upon which the Government could build and identified a number of areas of concern.

There was support from a majority of respondents for a legislative and regulatory framework, led by the federal government, to confront harmful content online.

Specifically, respondents were largely supportive of the following elements of the proposed regime:

• A framework that would apply to all major platforms;
• The exclusion of private and encrypted communications and telecommunications services;
• Accessible and easy-to-use flagging mechanisms and clear appeal processes for users;
• The need for platform transparency and accountability requirements;
• The creation of new regulatory machinery to administer and enforce the regime;
• Ensuring that the regulatory scheme protects Canadians from real-world violence emanating from the online space; and
• The need for appropriate enforcement tools to address platform non-compliance.

However, respondents identified a number of overarching concerns including concerns related to the freedom of expression, privacy rights, the impact of the proposal on certain marginalized groups, and compliance with the Canadian Charter of Rights and Freedoms more generally.

These overarching concerns were connected to a number of specific elements of the proposal. Respondents specifically called for the Government to reframe and reconsider its approach to the following elements:

• Apart from major platforms, what other types of online services would be regulated and what the threshold for inclusion would be;
• What content moderation obligations, if any, would be placed on platforms to reduce the spread of harmful content online, including the 24-hour removal provision and the obligation for platforms to proactively monitor their services for harmful content;
• The independence and oversight of new regulatory bodies;
• What types of content would be captured by the regime and how that content would be defined in relation to existing criminal law;
• The proposed compliance and enforcement tools, including the blocking power; and
• Mandatory reporting of content to law enforcement and national security agencies or preservation obligations.

Though respondents recognized that this initiative is a priority, many voiced that key elements of the proposal need to be re-examined. Some parties explained that they would require more specificity in order to provide informed feedback and that a lack of definitional detail would lead to uncertainty and unpredictability for stakeholders.

Respondents signaled the need to proceed with caution. Many emphasized that the approach Canada adopts to addressing online harms would serve as a benchmark for other governments acting in the same space and would contribute significantly to international norm setting.

The issue of dealing with online harms is a priority for this government; it is set out in the objectives within the mandate letters for 2 Cabinet Ministers. But, the issues are complex and it appears the government – a minority government – is proceeding cautiously.

There are models for Canada to examine in other jurisdictions. Last week, the UK announced that it would be strengthening its online harms legislation to target revenge porn, hate crime, fraud, the sale of illegal drugs or weapons, the promotion or facilitation of suicide, people smuggling and sexual exploitation (terrorism and child sexual abuse were already included).

As I asked last week, how do we ensure that actions to deal with online harms are consistent with Canada’s Charter of Rights and Freedoms, which guarantees “freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication”?

I wrote in late January, “those crafting new laws need to maintain a careful balance… ‘If we do nothing these problems will only get worse. Our children will pay the heaviest price.'”

How does the CRTC enforce an access order on a building owner? We’re about to find out.

On January 14, in Telecom Decision CRTC 2022-5, the CRTC told the owners of a multiple dwelling unit (MDU), Telegraph Square in Saint John, New Brunswick that enough was enough: provide Rogers with access to the apartment building “on reasonable terms and conditions” or “increasingly stringent regulatory measures will be applied to facilitate competition and maximize consumer choice.”

Those “increasingly stringent regulatory measures” were set out as:

• 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.

In a letter dated last week, we learned that the building owners have apparently not met the Commission’s first deadline. In response to a January 31 letter from Rogers, the CRTC has asked Bell to identify what services are being provided to which units in the building as of January 29.

“Due to Rogers continuing to be denied access to Telegraph Square, the Commission’s enforcement of the MDU Access Condition, as set out in Telecom Decision 2022-5, will impact Bell’s provision of service to the residents of Telegraph Square.”

Does the CRTC intend to include mobile wireless services in the application of its regulatory measures?

It is an interesting case to follow, testing the effectiveness of increasingly stringent regulatory measures to enforce orders indirectly.

Will consumers be caught in the middle?

The following article, by Robert Ghiz, CEO of the Canadian Wireless Telecommunications Association, appeared earlier today as an OpEd in Hill Times [“Price decline shows Canadian wireless on the right track”].

It is reproduced here with the permission of the author:

Price decline shows Canadian wireless on the right track
Recent headlines have been filled with news of the rising cost of housing, food, gas, and most other consumer items. So, it may have come as a surprise to some when the Minister of Innovation, Science and Industry, Francois-Philippe Champagne, recently announced that the price of mid-level mobile wireless plans have decreased by 25% over the 21-month period ending December 2021, and that the price of larger 10GB data plans decreased between 22-26% during this same period; after having already fallen 31% in 2019 and also eliminating overage fees.

For those of us who watch the wireless industry closely, the announcement merely confirms what we already knew. The cost of mobile wireless plans has been on a steady decline while the quality-of-service and network coverage of mobile services keep getting better.

How did this happen? Did government regulate the price of wireless plans? Did they force telecom operators to allow resellers, companies that are not willing to risk investing in building their own networks, to sell network operators’ services at fixed wholesale prices? They did not. The government did what most countries have now done; it recognized that the best way to stimulate investment in connecting more Canadians with high-quality services while also reducing prices is to promote competition amongst the companies that build and operate Canada’s digital infrastructure.

By having to compete not only on price but also on quality and coverage, Canada’s national and regional wireless operators have invested over $100 billion in capital expenditures and radio frequency spectrum licenses to build, maintain, and expand some of the best performing wireless networks in the world. This is no small feat given Canada’s large land mass, low population density, high spectrum costs, and short building season. In fact, consulting firm PwC has ranked Canada as having the highest network building costs among G20 countries. It is no wonder that Canadian network operators have spent more per wireless subscriber in building their networks than their G7 country peers, and over 60% more than the OECD country average.

The impact of these investments is measurable. Canada’s wireless networks reach 97% of the Canadian population, with average download speeds that have increased 116% over the last five years; speeds which exceed those of most other countries including the United States. By investing in both wireless and wireline networks, the telecommunications industry directly contributes over $70 billion in GDP to Canada’s economy and supports nearly 600,000 jobs across industries.

But there is much more work to be done. As the COVID-19 pandemic has shown, the industry’s investments in digital infrastructure have been critical to maintaining economic and social activity. As Canadian businesses and governments continue to accelerate the digitization of their products and services, ongoing investment in expanding and enhancing our digital networks will be key to Canada’s economic recovery.

For example, Accenture has estimated that investing in the deployment of 5G wireless networks in Canada will contribute an additional $40 billion in GDP to Canada’s economy by 2026 and add up to 250,000 new full-time jobs in the same period. The increased capabilities of 5G technology will not only enable innovative new products and services and help bring connectivity to underserved communities, it will also help Canada reach its greenhouse gas reduction objectives. Accenture has estimated that the use of 5G and other mobile technologies have the potential to address 23% of Canada’s total 2030 emission reduction target by 2025.

Canada’s future depends on connectivity. But it can only achieve these results by ensuring that policies and regulations continue to encourage investment in digital infrastructure. Accenture estimates that the initial roll-out of 5G will require $26 billion in capital expenditures by 2026, plus billions more in acquiring radiofrequency spectrum rights. Achieving this high level of investment requires continued recognition by policy makers that competition among network builders, also known as facilities-based competition, is the only way to continue to deliver on the three key objectives of coverage, quality, and affordability.

Canada’s future depends on it.

Each month, Statistics Canada tracks a large number of components in creating its Consumer Price Index. I track those related to the telecommunications sector, including the cellular price index. Over the past two years, Statistics Canada’s Cellular Price Index has fallen 27.45% as can be seen in the figure below.

I understand that small ISPs are upset with the CRTC. When the CRTC first released Telecom Order CRTC 2019-288 in August 2019, not only would wholesale rates be coming down dramatically, but there was to be a retroactive rebate of a third of a billion dollars paid to the ISPs. A windfall profit for the owners of the independent ISPs, estimated to exceed $325 million dollars. That’s 325,000,000 reasons for the little ISPs. They must have thought they won the lottery.

It was no wonder the facilities-based major internet companies used every available channel of appeal: to cabinet, the courts, and back to the CRTC itself. Cabinet agreed with the major companies, announcing in August 2020 that “Canada’s Future Depends on Connectivity”, signalling that the government was looking for the CRTC to make changes to its 2019 ruling.

On the basis of its review, the Governor in Council considers that the rates do not, in all instances, appropriately balance the policy objectives of the wholesale services framework and is concerned that these rates may undermine investment in high-quality networks, particularly in rural and remote areas.

Sure enough, the CRTC found that it had indeed made numerous errors in the 2019 ruling, and reversed itself in May 2021 with Telecom Decision CRTC 2021-188.

Ever since then, the independent ISPs have been waging war on the CRTC Chair, launching personal attacks calling for his removal, despite the decision being reached by the entire Commission. I described some of that populist revolt last summer.

The association of independent ISPs, CNOC, upped the ante yesterday by filing an application [pdf, 124 KB] seeking to have the Chair recused from virtually any telecom related file for the rest of his term.

It appears to be more of an appeal to the populace, than a serious legal filing, with mischaracterizations of a court decision and a misquote attributed to the CRTC Chair. In an interview in the Toronto Star earlier this week, the article says:

“I went for a beer with someone I have known for many years …. And it ended up he chose to address a broadcasting issue a little of what Bell might be doing in the future,” says Scott in the wide ranging, nearly hour-long interview.

The CRTC chair says the meeting between the two executives initially had nothing to do with business.

“However, because we talked about business he (Bibic) properly recorded this as required by the lobbyist registration,” says Scott. “It was in my agenda and left in my agenda. I didn’t hide the fact it took place.”

But the application filed by CNOC (at paragraph 22) cites this as: “Chairperson Scott’s admission to the Toronto Star—that he “went for a beer with
someone [he had] known for many years” to “address” matters within the CRTC’s jurisdiction”, changing the meaning of the so-called admission. The Toronto Star article does not say that he went for a beer to address matters within the CRTC’s jurisdiction. The article explicitly says that “the meeting between the two executives initially had nothing to do with business.”

The characterization of the meeting by CNOC is quite simply a dishonest representation of what is in the Toronto Star article. Paragraph 22 of CNOC’s application changes the meaning of the so-called “admission”.

As to the Chair’s so-called “personal preference for facilities-based competition”, it is actually a statement endorsing CRTC and government policy going back almost 30 years. For example, in Decision 92-12 (a personal favourite of mine), we read:

The Commission considers that resale can provide many benefits, but it is not a substitute for facilities-based entry. Facilities-based entry permits sustainable and more broadly-based competition, thereby increasing the benefits to be derived from competition. A facilities-based carrier has more control over its facilities costs. Since a reseller leases its underlying facilities and operates at the margin provided for in the price of leased facilities and services, a reseller is at risk wherever carriers can reduce these margins.

A preference for facilities-based competition should be a qualification to be Chair. It is not a defect.

As I wrote last summer, a retired Director General from Industry Canada has said “Calling for the firing of the Chair because one is not happy with a decision is totally inappropriate. What is the point of having an independent regulator if that regulator could be fired whenever a disaffected party could convince the government to do so? … Populism has no place in the administration of fair regulation.”

CNOC’s application is unfair and smacks of desperation.