Search Results for: incentives to invest

Financial Times has an article called The broadband numbers racket, by former FCC chief economist Thomas Hazlett, now a professor of law and economics at George Mason University.

Hazlett points out that too many people use superficial selection of statistics to bolster questionable policy positions.

Cherry picking broadband penetration numbers to imply the US is slipping into Third World status is fine for a quickie term paper, at least if Wikipedia goes down. But adults ought sort through the multi-dimensional complexity of the real world –

The article refers to a paper published in the Review of Network Economics [ pdf, 138KB]. The paper looks at different models of regulation on broadband networks and among the findings, it states

incentives for network investment decline when network owners lose a set of valuable property rights.

Both articles – from Financial Times and Network Economics – make an interesting read.

As I mentioned earlier this week, responses to the March 11 Cabinet appeals were submitted on Monday. A few parties cobbled together rushed submissions and at least one group asked for an extension – it is almost as though some groups were reminded of the deadline by this blog!

TELUS summarizes its reply comments with a call for policies that encourage and not discourage investment and innovation.

You cannot expect carriers to make risky investments if they are forced to share new infrastructure at artificially low rates in order to benefit competitors that won’t invest.

CAIP has filed responses that support the MTS Allstream application and call for the Bell and TELUS applications to be denied. In its press release, CAIP said:

Canada is no longer a broadband leader and Canadians are paying higher prices for an inferior product than customers in other OECD countries. If Bell and TELUS prevail, the situation for Canadian customers and businesses will only get worse.

Of course, absent investment in their own infrastructure, it is unclear how ISPs that resell telco DSL access services are driving increased speeds for Canadian consumers. The ILEC argument is that it is precisely the requirement to share their infrastructure that stifles their appetite for risky investment.

The outcome of the cabinet appeals will impact incentives for investment and innovation. What policy will guide carriers building and delivering broadband services to businesses and consumers. How will Canadian broadband networks evolve?

We’re exploring that theme at The 2009 Canadian Telecom Summit on Monday June 15, with a panel of leaders with different approaches in rural and urban settings. What are the roles for fibre, wireless and satellite technologies?

On Tuesday June 16, the Regulatory Blockbuster and the panel on Network Neutrality will look at key issues from a policy perspective. And don’t forget the address by MTS Allstream CEO Pierre Blouin who can be expected to lay out his views on the case before cabinet. The conference opens on June 15 with an address by Rogers’ CEO Nadir Mohamed.

Have you registered yet?

I received a bizarre email last Thursday that tried to appeal to my nationalist sentiments. According to the email, I should be recommending Nortel equipment to my clients because it is Canadian.

Not because it is the best way for service providers to deliver leading edge solutions to their customers; not because it is cost effective; not because it makes my services run faster and jump higher. The appeal says that we should buy Nortel’s stuff because Nortel’s stuff is Canadian; because Canadians created 5000 Nortel patents and Nortel invests pantloads of cash in Canadian R&D.; [You can see a web version of the email here.]

There is a promotion [ pdf, 674 KB] that provides cash incentives to consultants who recommend Nortel business solutions to their clients and I guess it is trying to appeal to my colleagues’ patriotism.

It seems to me that Nortel’s Canadian roots may be an interesting factor, but is it a reason to buy? I used to look to the Detroit 3 automakers because of where my in-laws live, but that loyalty seemed to be a one-way love affair.

How relevant is the flag flying in front of your suppliers’ headquarters?

Technorati Tags:
Nortel, Canadian

A loyal reader, frequent commenter and fellow eater of kippers for breakfast sent me a link to a release from the US Chamber of Commerce, describing two new major studies showing the economic benefits of delivering broadband to all consumers, especially senior citizens.

The papers recommend that the federal government should adopt policies to incent investment in broadband infrastructure.

The two reports, Network Effects: An Introduction to Broadband Technology & Regulation [pdf 288K] and the first of 4 companion reports: The Impact of Broadband on Senior Citizens [pdf 482K], provide a number of policy recommendations with a US focus but relevance for Canada. Other companion reports to be released will review the impact of broadband on telemedicine, people with special needs, and education.

These US Chamber of Commerce reports are worthwhile reading over the holiday period.

We will want to look at them further in the new year – especially in preparing for the CRTC’s internet network management proceeding.Here is a sample of what the US Chamber has to say:

Network regulation would serve only to slow innovation and discourage continued network deployment by increasing regulatory uncertainty and decreasing financial incentives to deploy advanced infrastructure.

The Chamber also suggests some guiding principles for ensuring that all U.S. consumers have access to broadband and broadband-enabled tools. So far, Canadian initiatives have been provincial initiatives.

In recent months, we have seen 3 provinces announce universal broadband access plans: PEI, Saskatchewan and last week’s announcement from New Brunswick.

What will be the role of the January federal budget in launching national broadband infrastructure initiatives? How will we create an effective, pro-competitive national broadband strategy for Canada?

Bill St. Arnaud recently pointed to an Educause whitepaper: A Blueprint for Big Broadband in the US.

The paper strikes me as alarmist right from the opening lines.

The United States is facing a crisis in broadband connectivity. The demand for bandwidth is accelerating well beyond the capacity of our current broadband networks, especially as video traffic and home‐based businesses become more prevalent. In the very near future, a single family will be watching HDTV video at the same that they engage in remote health monitoring, videoconferencing, gaming, distance education class lectures, and social networking.

The authors seem to feel no compulsion to be factually accurate, completely ignoring Verizon’s fibre to the home initiative and the cable industry’s investments in advancing higher speed internet access services, such as those first announced by Videotron, but coming to all major cable systems:

While other nations are preparing for the future, the United States is not. Most developed nations are deploying “big broadband” networks (100 Mbps) that provide faster connections at cheaper prices than those available in the United States.

Like New York Governor Spitzer, this January 2008 report points to Canada as a shining light:

The paper recommends the public‐private partnership approach followed in Canada, where one‐third of the funding would be provided by the federal government, one‐third by the states, and the remaining one-third by the private and / or public sector.

Bill St. Arnaud correctly points out that public private partnerships are hardly a guarantee of success.

Several municipal and government funded broadband initiatives are in already in trouble such as Utopia, Philadelphia WiFi and South Dundas (which is paradoxically is cited as good example in this paper).

Allow me to digress a moment.

I was at a meeting last week for a volunteer organization that was looking to get more involved in advocacy for social action causes. Among the issues that we plan to address is child poverty and the working poor in families led by single women. Almost immediately, there was a call for minimum wages to be raised. I objected to advocating such a subject. Raising the minimum wage isn’t a goal; it is one of the means to achieve a goal. After a lively discussion, we looked at goals such as enabling immigrant professionals to achieve Canadian accreditation; ensuring all children have access to meals at school and a roof over their heads to sleep.

I have written before about defining requirements rather than solutions. This report advocates for Canadian style solutions, yet it shows that Canada is behind the US on many measures – such as broadband connections per 100 inhabitants, average advertised speed, average cost, etc.

Bill’s comments on the study asks about increasing facilities based competition.

The challenge with broadband in North America is lack of facilities based competition. What we need to find out is why the big telcos and cablecos are not deploying infrastructure in their competitor’s territory? They seem to have no problem deploying nation wide wireless networks, but nobody wants to make the make investment in nation wide broadband in direct competition with existing incumbents. What are the hurdles? Is broadband a natural monopoly?

There is clearly no monopoly in broadband. There are two facilities based players and opportunities for others to build. Competition between cable and telcos has driven technology deployment that matches consumers’ willingness to pay.

Government involvement in dark fibre will result in a monopoly on facilities that removes incentives for innovation. We have government bodies that have determined these markets to be competitive. Why would we want to establish a state-owned monopoly?

Let me suggest that the role of Government is to set goals, not intervene in solutions.

If necessary, perhaps Government could administer and provide needs-based subsidies or tax credits directly to consumers. As difficult as it may be to resist, there seems to be a temptation to distort the marketplace by building infrastructure.

Michael Geist suggests that Barack Obama has led other candidates in placing technology policy as a campaign issue. What broadband policies will emerge in this year’s elections south of the border and posturing in Canada?