There are competing policy approaches to build national leadership in a digital future.

A recent article by Mark Jamison describes a choice American voters might make this November. He describes a Republican platform, embracing “the consumer-oriented and business-led economic policies that made the US the leading country for tech startups, AI research capacity, and creating world leading tech giants.” On the other side of the ballot, is the Democratic platform, with “a European-style government-built economy where government is the creator of jobs and director of business.”

Dr. Jamison is the director of the Public Utility Research Center at the University of Florida’s Warrington College of Business.

Dr. Jamison says the Democratic platform puts government as the central planner for evolution of the information technology sector. “In this paradigm, the government creates tech hubs, breaks up companies, and oversees what businesses do. The vision is clear: Government supervision and direction are necessary to distribute the benefits of technology and curtail large, successful businesses.”

He describes an alternate vision, with government simply setting out a legal framework for economic and technological development. He describes the Republican platform as emphasizing deregulation to spur innovation. “An underlying belief is that less government interference allows for greater technological advancements, led by customers and the private sector.”

Last week, I referred to the European Union’s newly released report, “The future of European competitiveness”. The report laments “there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years, while all six US companies with a valuation above EUR 1 trillion have been created in this period.”

The problem is not that Europe lacks ideas or ambition. We have many talented researchers and entrepreneurs filing patents. But innovation is blocked at the next stage: we are failing to translate innovation into commercialisation, and innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations.

There are competing visions for how governments should support the economic drivers for a digital future. Europe is being advised that past approaches favouring heavy regulatory intervention are counter-productive.

Dario Betti, CEO of the Mobile Ecosystem Forum, was quoted by Telecoms.com asking “should telecom services be treated as utility services like water, electricity, and gas, where government oversight limits prices but stifles innovation? Or should the industry operate as a free market, where businesses innovate, set prices, and consolidate freely?”

I question whether US voters will actually place an emphasis on economic platforms when voting for president. I think other fundamental questions are (or at least, should be) front of mind for voters. Perhaps pocketbook issues will play a bigger role as voters fill out other portions of their ballots, such as voting in congressional and senate races.

Based on what I hear in Parliamentary Committee meetings, it isn’t clear that one political party favours a materially different level of government intervention in the market. Once we get past the carbon tax rhyming rhetoric, I wonder if a change in government will simply replace the name of the Industry Minister with a thumb on the scale.

Will competing visions for a digital future emerge in the development of election platforms in Canada?

Effective with the release of the August 2024 Consumer Price Index (CPI), Statistics Canada is enhancing the way it calculates the cellular services price index.

Each month, I examine the telecommunications-related components of the CPI, and I frequently refer to the results on these pages (such as here or here) or on social media.

Last month, Statistics Canada’s CPI release included a notice of an “upcoming enhancement”. The technical note, available in HTML or pdf formats, contains a lot of statistical jargon that reminded me of my graduate school days.

But there is a lot of summary information that everyone can understand. Bottom line? Statistics Canada is getting information on actual sales to calculate the cellular services component of the Consumer Price Index.

The Consumer Price Index (CPI) measures price change by comparing the cost of a fixed basket of consumer goods and services through time. To produce a CPI that accurately reflects the experience of Canadians, Statistics Canada regularly updates the methodologies of various components of the CPI. The method used to calculate the CPI follows accepted international standards. It is also regularly reviewed internally and by experts outside the agency, and adjusted as needed to ensure it meets best practices.

Effective with the August 2024 release, “Statistics Canada now receives monthly transaction data containing plan level information from WSPs with several retail brands across Canada.” The transaction data provides a more comprehensive source of information used to enhance the index than the previous methods of data collection, and Statistics Canada says it represents a “more complete picture of the market.”

There is a cautionary “however” attached to the enhancements.

This enhancement improves the quality of the data, while ensuring the representativeness of prices paid by Canadian consumers. Users should exercise caution when interpreting the year-over-year change for the first 12 months following the implementation of a new methodology and data source.

Users are also advised to exercise caution when making provincial/territorial comparisons. The market shares of the sampled wireless service providers vary across provinces and territories, and price changes derived from transaction data may differ from price changes derived from web-collected data as transaction data includes monthly charges for in-market and legacy plans, while web-collected data only contains monthly charges for advertised plans.

It bears repeating with emphasis: “Users should exercise caution when interpreting the year-over-year change for the first 12 months following the implementation of a new methodology and data source.”

I will be starting a new spreadsheet effective with tomorrow’s CPI release. Watch out for anyone citing the CPI for year-over-year changes in cellular services prices.

I have frequently written about government keeping out of the way. The phrase “out of the way” appears in about 25 of my posts.

Twice, I used the same title, “Getting out of the way” [2012, 2016]. Earlier this year, in “Let the marketplace work”, I describe government policies and regulations inhibiting capital investment by the telecom sector.

So, it was with interest that I read a recent article on “The Hub”, “Want to be a more productive country, Canada? Get the government roadblocks out of the way” by Jerome Gessaroli. He says “policies relying on government intervention to replace the free market seldom produce improved growth and productivity.” His article includes 4 policy recommendations relating to government maintaining a smaller economic footprint.

Mario Draghi’s newly released report for the European Union, “The future of European competitiveness” [Part A (A competitiveness strategy for Europe) pdf, 3.4MB | Part B (In-depth analysis and recommendations) pdf, 11.5MB], cites “inconsistent and restrictive regulations” among the hindrances for innovative company growth. The report calls for reducing the regulatory burden imposed on European companies. “More than half of SMEs in Europe flag regulatory obstacles and the administrative burden as their greatest challenge.” According to the report, “Regulation is seen by more than 60% of EU companies as an obstacle to investment”.

In other words, I’m not alone in wanting government to stay out of the way.

A few years ago, I quoted Ronald Reagan’s 1986 remarks to the National White House Conference on Small Business. “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

That approach gives the appearance of government doing something, but rarely achieves a positive long-term outcome. It seems to be where Canada is heading with its legislation on the digital economy. The Online News Act and Online Streaming Act already drove unintended consequences, as predicted. In addition, Canada is risking a trade dispute with the US over its approach to taxing digital services.

It is so very tempting to intervene in the marketplace. It takes much stronger leadership to trust in the power of competitive markets. Look at the telecom market. Canada ensured there are 4 well-capitalized facilities-based wireless service providers operating in most of the country, including all population centres. These service providers have sufficient spectrum and technology to compete in both mobile and fixed markets.

Continued regulatory intervention in the marketplace threatens to return Canadian telecom to the haphazard Calvinball era of a decade ago. Such an environment discourages investment, precisely the opposite of what is needed to drive productivity.

Government needs to try a new approach. Stand aside.

A couple recent papers crossed my desk that examine bridging the digital divide. The papers try to help understand factors that limit adoption of residential broadband.

Former CRTC Chair Ian Scott released a paper via IRPP (the Institute for Research in Public Policy), “Conquering the Next Frontier in Bridging the Digital Divide” [pdf, 478 KB]. The paper sets out recommendations for improving internet access in underserved communities.

He observes, “Low-income Canadians, regardless of where they live, struggle to afford the technology and internet plans needed to take full advantage of the digital economy.”

The September 2024 issue of Telecom Policy includes an article examining the US Government’s Affordable Connectivity Program (ACP). “Understanding uptake in demand-side broadband subsidy programs: The affordable connectivity program case”.

The results of this study suggest several opportunities for adjusting ongoing initiatives and designing new direct support programs for broadband that should be of interest to policymakers at different administrative levels (federal, state, county and even more local) as well as to other stakeholders. The positive correlation between ACP enrollment and areas with a large share of households in severe poverty underscores the social dimension in ACP enrollment decisions. Since not all eligible households were enrolled in ACP, it is likely that “early adopter” households conveyed information through local networks about the program’s benefits. This may have encouraged other low-income households to enroll sooner than they might otherwise.

The researchers found that local housing policies may help encourage families to subscribe to low-cost internet programs. The paper notes that the FCC established a pilot program to fund ACP outreach through local housing authorities and housing advocacy organizations. The authors also observed a positive association between the presence of public libraries and ACP enrollment rates, indicating that anchor institutions may facilitate enrollment.

On September 24, IRPP will be hosting a lunchtime seminar (in Ottawa and online via Zoom). “The Next Frontier in Canada’s Digital Divide” is being promoted as a conversation about digital connectivity across Canada.

Indigenous and northern communities are still behind the rest of Canada in terms of the availability of internet at speeds needed to take full advantage of essential services such as health care, education and remote work. Low-income Canadians also struggle to afford the technology and internet plans needed to participate in the digital economy, including government services and information, banking, health care, education and employment. To overcome these gaps, governments should pursue new approaches that address the needs of underserved communities and improve the affordability of the internet.

In “Mapping the digital divide”, I wrote that it isn’t enough to have affordable broadband at everyone’s doorstep. Do we even agree on what “affordable broadband” means. I have frequently called for more research to understand those factors that inhibit adoption. There are populations with access to broadband, even where targeted affordable options are available.

Do we need to invest more in developing digital skills?

How do we develop strategies to overcome digital phobias among underserved populations?

As Artificial Intelligence tools become more pervasive, I wonder about the impact on ‘real’ intelligence.

Sixteen years ago, Nicholas Carr had an article in The Atlantic entitled “Is Google Making Us Stupid?”

Over the past few years I’ve had an uncomfortable sense that someone, or something, has been tinkering with my brain, remapping the neural circuitry, reprogramming the memory. My mind isn’t going—so far as I can tell—but it’s changing. I’m not thinking the way I used to think. I can feel it most strongly when I’m reading. Immersing myself in a book or a lengthy article used to be easy. My mind would get caught up in the narrative or the turns of the argument, and I’d spend hours strolling through long stretches of prose. That’s rarely the case anymore. Now my concentration often starts to drift after two or three pages. I get fidgety, lose the thread, begin looking for something else to do. I feel as if I’m always dragging my wayward brain back to the text. The deep reading that used to come naturally has become a struggle.

I have referenced that article a few times on these pages. It came to mind this past weekend as I watched a segment of CBS Sunday Morning by David Sedaris. “The way you talk to a person says a lot about you, of course, but so, too, does the way you talk to a device.”

I rarely drive anywhere without using the Waze app on my phone to get real-time traffic updates. As a result, who needs to rely on “traffic on the ones” from the local news radio? In the past, I maintained a mental phone directory of hundreds of numbers. Now, voice commands mean I no longer need to commit phone numbers or addresses to my prefrontal cortex and hippocampus.

For most of the past two months, I had youthful visitors who enjoyed driving Alexa crazy with requests like, “Alexa, play Baby Shark”, and “Alexa, what is the weather today?” Of course, Alexa couldn’t be driven crazy; that privilege was reserved for just the owner. My wife insisted on the kids adding “please” and “thank-you” to the requests in the hope they would develop some useful skills when dealing with real-life assistants. (As though Alexa cared.)

Despite the availability of a wide variety of screens to entertain 5 kids ranging in age from 10 months to 10 years, down-time was often spent reading books. Real, old-fashioned paper books. Each of the kids had their own book bag of curated titles, restocked a few times through the summer. The bags were adorned with Canadian imagery, as part of my wife’s not-so-subliminal campaign to get the kids to move back home.

I appreciate the efficiencies of the latest AI tools.

We have to marvel at the possibilities enabled by advancements in Artificial Intelligence. And, I often think back to working at Bell Labs with some of the people who created the basics for what is now coming to market.

But, I also wonder about the impact of Artificial Intelligence on ‘real’ intelligence. What will be the impact of these technologies on our abilities to develop the next wave of advancements?

Are our minds made stronger by a foundation in classical education methods? As kids head back to school, do we still need to maintain focus on the old-fashioned 3-Rs: reading, writing and ‘rithmetic?