To better understand the digital divide

The Pew Research Center is a jewel in the crown of social research, acting as a non-partisan “fact tank” without taking policy positions on issues. Through the years, it has produced valuable research on the internet and technology that I have highlighted more than a dozen times through the years, often adding that it is unfortunate no such institution exists in Canada.

In May, I referred to a dataset released by Pew that looked at perspectives on the internet based on research gathered in April, during the first month of the pandemic.

A couple weeks ago, IIC held a webinar looking at “American life in the midst of crisis”, featuring a discussion led by Lee Rainie, Pew’s Director of Internet and Technology.

I have embedded the 90 minute webinar here. Around the 26:40 mark, we are provided with some particularly interesting insights from data on Internet Use and Attitudes During the Crisis.

Among the findings highlighted from the April data was a chart showing that 53% of Americans considered the internet to be essential, with another 34% saying it was “important, but not essential”. Ten percent said it was not too important and the remaining 3% said it was not important at all. Looking at these responses by demographic groups, we can see the influence of age, education, income and urban versus rural respondents.

Again looking at the April dataset, there were also charts that I found interesting on US attitudes on the role of government in ensuring all Americans have a home high-speed internet connection and cellphone during the coronavirus outbreak. Roughly two thirds of Americans felt that government did not have this responsibility.

Nearly 60% of lower income Americans surveyed in April said that their children would encounter at least one of the following problems in participating in online classes: having to use a cellphone for connectivity; having to use public Wifi (because there was no home internet connection); or, not having access to a home computer. Interestingly, 80% of Americans said that schools should provide computers to students during the pandemic: 37% said to all students; 43% responded only for students from families that could not afford it.

Contrasting the opinions on the role of government on broadband access versus the supply of computers, the analysis suggested that when kids were involved, more Americans felt government intervention was warranted.

In the discussion section of the webinar, we are told “it’s relatively easy to say in the abstract that broadband ought to be a human right, and that governments have a responsibility to provide it particularly in school contexts”, but “compared with the other things we want government to do, is this a high priority or not? For some people it really is, but for significant numbers of people, there are other ‘stressors’ in their lives or other public policy preferences that they have, that make them think that broadband is not necessarily a top-of-mind top priority.”

As Mr. Rainie says, it will be really interesting to see whether people’s priorities have shifted when Pew conducts its next survey on these issues.

As you playback the webinar, be sure to listen to the discussion for the ‘colour commentary’ that follows the initial presentation of the data. There have been shifts in attitudes over time, lending support to my perspective that we need to turn our minds toward examining digital literacy and demand side factors for adoption of broadband.

Looking at the treasure trove of information being gathered by Pew, once again I am reminded that we need more data to inform our policy making in Canada.

An expense gap in the rural digital divide

It costs more to provide most goods and services in rural areas than in urban settings. This isn’t just an issue for telecommunications service providers, but nearly every product and service, including basic needs like groceries.

In many of these rural communities, the price people are willing to pay for broadband service do not allow a service provider to recover its costs. That has led to the myriad of funding programs at all levels of government, attempting to off-set the shortfall in the business cases for telecommunications service providers, so that rural prices can be brought within sight of urban levels.

In recent years, we have seen some significant levels of subsidies handed out, frequently in the order of $4000 per household and higher.

Depending on the broadband funding program, applicants generally produce a plan indicating the business case to extend broadband service to a given region. The program usually covers the shortfall in the business case by subsidizing a portion of the upfront capital costs. In order to minimize disruption to the workings of marketplace, the programs usually require evidence that, absent funding, the proposed project would not be financially viable.

One of the challenges in providing service in rural territories is that the ongoing costs for installation, operations and maintenance is often higher on a per subscriber basis. Technicians experience lengthy unproductive “windshield time” driving between locations. Lower population densities and harsher geographic conditions contribute to higher capital costs on a per subscriber basis, and can also lead to higher operating expenses.

A 2017 FCC report (“Improving the Nation’s Digital Infrastructure” [pdf]) is one of the few studies I have seen recognizing that, for some of the most challenging locations, there would not be sufficient revenue available to cover ongoing costs, so it suggests a requirement for an annual subsidy program. In the US context, the report suggested that a $2B annual subsidy would be required on top of $40B in up front subsidies.

The CRTC used to operate an explicit subsidy program for High Cost Serving Areas. In 2016, when the Commission established its “Modern telecommunications services – The path forward for Canada’s digital economy” under Telecom Regulatory Policy 2016-496, it began “to phase out the subsidy that supports local telephone service.”

Was this a mistake?

As noted in “Canada’s Communications Future: Time to act” [pdf], the report of the Broadcasting and Telecommunications Legislative Review Panel, indigenous communities said they are “looking for a more inclusive consultation process in the development of any fund to support broadband buildout with more constant, stable, and accessible funding.” The report noted “Historically, the preferred approach has been to provide one-time contributions toward capital costs to build networks or the leasing of satellite capacity to serve remote communities.”

Business cases for broadband subsidies have a finite time horizon. What happens at the end of that period? Should Canada be preparing for an ongoing cross subsidy for high cost serving areas? Should one-time contributions be supplemented with a “more constant, stable” funding mechanism to account for higher ongoing operating expense for service providers operating in certain areas? The alternative is that rural areas will suffer sub-standard service levels in perpetuity.

Governments – at all levels – have responded far too slowly to the COVID19 pandemic in releasing broadband funding. There is no question that Canada’s governments could have and should have moved faster to get broadband projects launched in unserved and under-served regions. We missed the entire 2020 construction season and many companies are already in the process of setting their 2021 capital budgets.

At some point, hopefully some day soon, various federal and provincial broadband programs will be opened to for the next round of applications, funds will allocated to projects, construction will take place and more customers will be connected.

It likely won’t be long before some service providers reach the end of their original business cases and find there is an operating shortfall in remote regions. What happens then?

Some might say that we should simply accelerate the release of funds and not take time to worry about the future. I disagree. When should we start to consider how to deal with the eventuality of operating expense shortfalls?

40 years and counting

Forty years ago today, I walked into Bell Canada’s main Central Office in Windsor to start my first ‘real’ job, doing traffic studies and analysis for many of the smaller switching centres between Chatham and Windsor.

The best thing about Windsor in those days was the city across the border to its north. I like to tell people that I was sentenced to a year in Windsor but got out early for ‘good behaviour’. I was transferred into London just 8 months after starting.

We were back in the Motor City area, this time on the other side of the border, just a few years later, immediately following the breakup of AT&T. Those were fun times in the US telecom market.

I was an advisor to General Motors as it designed and built its own internal communications network, linking its global facilities. A couple years later, I spent about 18 months at AT&T Bell Labs, working with some of the brightest people on the planet. I learned a lot about managing and recruiting while I was there, as I have written previously.

Three years ago, as I turned 60, I wrote some comments that continue to hold true.

My advice to my kids and grandkids can be summed up as: find a career doing something you love doing; aim to be the very best at what you do; find people who share your values to do it with; and, remember that family should always come first.

As I wrote a few years ago:

Fortunately, most of the time when I was in a corporate environment, I had bosses who shared my priorities. There are countless examples, including one of my favourite moments from a little over 25 years ago. Preparing for CRTC hearings was a stressful and intense time: in the olden days, witnesses were sworn in (or affirmed) and opposing parties had an opportunity to cross-examine. Just before the Long Distance hearings opened in 1991, we were preparing in Ottawa with our law team. My daughter’s birthday was during the week before the hearings opened and her teacher had planned a special celebration. I flew back to Toronto for a couple hours, kept a cab waiting at the school to rush me back to the airport so we could continue the hearing preparations – flying was a lot easier then. The teacher went over to my wife and said “it is so nice that your husband has the kind of job that allows him to get away for a few minutes.” I hope that my kids are as fortunate.most of the time when I was in a corporate environment, I had bosses who shared my priorities. There are countless examples, including one of my favourite moments from a little over 25 years ago. Preparing for CRTC hearings was a stressful and intense time: in the olden days, witnesses were sworn in (or affirmed) and opposing parties had an opportunity to cross-examine. Just before the Long Distance hearings opened in 1991, we were preparing in Ottawa with our law team. My daughter’s birthday was during the week before the hearings opened and her teacher had planned a special celebration. I flew back to Toronto for a couple hours, kept a cab waiting at the school to rush me back to the airport so we could continue the hearing preparations – flying was a lot easier then. The teacher went over to my wife and said “it is so nice that your husband has the kind of job that allows him to get away for a few minutes.” I hope that my kids are as fortunate.

I said earlier that the mid-80’s were a fun time in the US telecom market. In actuality, for 40 years I have found my vocation to be fun.

I continue to enjoy waking up and finding new opportunities, every single day.

I hope you are similarly blessed.

Join a special pre-Summit webinar series

Following up on my blog post from last week, I want to highlight a complimentary webinar series that I will be hosting in the lead up to The 2020 Canadian Telecom Summit (virtual edition), taking place November 17 – 19.

The first of the webinars will be taking place next Monday, October 26.

  • Webinar: Untapped Horizons For Content Providers
    Date: Monday, October 26th – 2:00pm [Eastern]
    In this session, Adam Lipper, Director of Business Development (Ecosystem) at Huawei Canada Consumer Business Group, will take the audience on a tour of the mobile app marketplace and landscape. With Huawei growing its ecosystem by launching Huawei Mobile Services and Huawei AppGallery in Canada, what are the benefits to both consumers and content providers? Adam will share notable stories of partnerships already built with local Canadian content providers. This session is available now on-demand.

  • Webinar: The Urgency to Increase Connectivity
    Date: Thursday, October 29th – 2:00pm [Eastern]
    For millions of Canadians, high-speed Internet remains out of reach. In a world where the Internet has become fundamental to how we live, work and play, this puts too many Canadians at an economic and social disadvantage. In this session, Robert Backhouse, SVP & Chief Technology Officer at Huawei Technologies Canada, will explore the challenges of increasing connectivity in rural and remote areas, and emphasize the need for government to accelerate its plan to connect all Canadians to broadband Internet by 2030. This session is available now on-demand.

  • Webinar: Challenges Along an Evolving Cybersecurity Landscape
    Date: Thursday, November 5th – 2:00pm
    In this session, Olivera Zatezalo, Chief Security Officer at Huawei Technologies Canada, will provide a high-level view of current cybersecurity challenges relating to both 4G LTE and emerging 5G technology. In the context of describing the strengths and vulnerabilities of any mobile network, Olivera will offer insights into how Huawei has maintained a flawless security record in Canada, its ongoing working arrangement with Canada’s security agencies, and its commitment to independent third-party testing of its products to ensure their security and integrity. This session is available now on-demand.

and wrapping up with this special session:

  • Webinar: The Future of the Internet
    Date: Wednesday, November 11th – 2:00pm
    How will tomorrow’s Internet be shaped by the escalating geopolitical tensions between China and the United States? In the aftermath of the U.S. elections, Alykhan Velshi, VP, Corporate Affairs at Huawei Technologies Canada, will offer insights into what lies ahead for the most important bilateral relationship in the world – and its potential impact on technological progress. What is the legacy – and the future – of Donald Trump’s “America First” agenda? Alykhan will also explore the current state of China-Canada relations. This session is available now on-demand.

As you can likely tell, the webinar series is sponsored by Huawei.

I hope you will join me for some or all of the one hour sessions. Click here to register.

Finding advantages in learning online

The response to the global pandemic has forced dramatic shifts in the way classes are being taught at all levels, from pre-school through university and ongoing continuing education.

Trust me.

As someone who organized live business conferences for nearly 20 years, the transition to online isn’t an easy one. From a distance, I have watched my grandson entering first grade and having to shift to learning on-line after just one week of learning in-person. His younger brother has meet-ups by Zoom with his nursery school classmates, doing arts and crafts with materials dropped off by his teacher. A friend’s daughter, who finished high school (virtually) in June, entered university last month, without the traditional frosh week festivities and restricted to meeting her classmates in cloud based chat rooms. It can’t be the same immersive university experience that her older sister (who graduated in April) enjoyed. No graduation ceremonies. Diplomas arrived in the mail.

While each of these examples demonstrate a downside to the online experience, there are positive experiences emerging. Professor Mark Lautens of the University of Toronto wrote in Monday’s Globe and Mail, “Online learning can be eye-opening for both teachers and students”:

Professors are a fortunate lot. We get to interact with some of the brightest minds of the future when they are still at their most open and receptive. Traditionally students would travel great distances to gain the best education that was open to them. Now they rearrange their lives in order to learn and interact in real-time.

Don’t get me wrong. I am not a fan of online teaching and would never choose this option if given the choice. On the other hand, it might provide a way to service communities that have historically been underserviced and under-represented.

Life often gives us no choice or two less-than-ideal choices. These students have chosen to be deeply engaged, despite the inconvenience this presents. Our future may be brighter than we often imagine.

I have found time to participate in regular online luncheon learning in my community, thanks to being able to avoid commuting time to the location. More significantly, I was also able to frequently drop into a class being conducted online from San Francisco, joining my son for an hour each week. Over the summer, I participated in a couple sessions hosted by the Public Utilities Research Center at the University of Florida.

Unrestricted by the cost and time associated with travel and being able to avoid expensive accommodations, we now have the ability to participate in sessions around the world. You can pop into a class hosted in Florida in the morning and another in California for lunch.

I have started to participate in the webinar series offered by the International Telecommunications Society, gaining a global perspective on a wide variety of policy issues. The sessions are scheduled in the morning for the East Coast of North America, making it mid-afternoon in Europe and late night viewing in Asia. There was a global round-table on COVID notification apps last month, and coming up in the next few weeks, there are a couple sessions of interest to readers of this blog:

And of course, The Canadian Telecom Summit (virtual edition) is coming up next month, November 17-19.

In an environment with budgetary challenges due to the economic impact of the pandemic, virtual learning provides affordable access to global leaders. In the case of the ITS webinar series, registration is free.

As Professor Lautens wrote, given the choice I would prefer to engage with my colleagues face-to-face, up close and personal. But in the meantime, take the opportunity to undertake some continuing education. You just may find there can be advantages to learning online.

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