Search Results for: incentives

As I was reading the latest rants by Barenaked Ladies’ Steven Page, I was struck by the similar language used by both the Creative Commons crowd and the Net Neutrality advocates. I tripped upon this as I was reading a commentary in one of the trade papers that seemed to be arguing that, since digital technology makes copying so easy, we need to just let it happen.

It turns out that Lawrence Lessig noticed similarities between Fair Use and Net Neutrality a few days ago [which scares me, in that I don’t often agree with his perspectives].

I find it interesting, but not necessarily surprising, that successful musicians are revolting against the distribution system. I am certain that many are having second thoughts about the contracts that they signed when they were starving artists and now are spinning out obscene amounts of cash for their labels.

Is the need to transform the traditional music industry business model based on the view that technology has made the theft of music so easy? I need something more: it just sounds like the same argument that a street gang member could make, sneering that the innovation of steel crowbars made glass obsolete, so the jewellery industry had better transform their business model.

Copyright reform and network neutrality share a theme. Both are concerned with the public’s use of other people’s property. In one case it is intellectual property; in the other, it is the digital transport network. Who owns these assets? Who determines the limits on what the owner can charge? The marketplace? Government?

In settling both issues for the ‘here and now’, we need to be concerned with ensuring that there remain incentives that foster further development. Encouraging the development of both intellectual property and digital networks. These are important issues that require far more thoughtful discussion and less shouting of catchy slogans.

I have been reading (itBusiness, Globe, Star) about Toronto’s plans to get onto the global map for Information, Communications and Technology (ICT) research, development and production. I have to admit I am more than a little bit cynical.

The city’s report claims that Toronto is third to San Francisco and New York for ICT in North America, and yet, the city wants more. It sounds like a Rodney Dangerfield cry for ‘We don’t get no respect’. So let’s throw some government money to make us feel better. Toronto is number 3 in North America. It wants to be in the top 5 in the world.

Why am I cynical? This is the same city that has fought the telecom industry whenever it wanted to install fibre under the streets. In fact, it feels so strongly about the evil wealth of the telecom sector, that it has used their tax dollars to fund court appeal after appeal after appeal of the CRTC’s decision that says cities have to stop pillaging the industry. As I have written before, the CRTC and the courts have told the cities: “Enough!”

Toronto is the same city that pays for its publicly-owned electric utility to offer free WiFi, not to provide high speed access to the underprivileged areas of the city, but to compete head-to-head against the private sector in the city centre.

Want a good start to stimulate ICT? How about declaring the GTA to be a ‘telecom friendly free-trade zone’? If carriers want access to upgrade facilities, why not welcome them with the same gusto that Toronto has for the movie industry? It seems to me that movie production trucks are a bigger source of traffic tie-ups than fibre-optic construction, but no one (including me) would complain about them disrupting the movement of cars. Let’s be as positive about new telecom infrastructure.

Fostering private sector competition – vigourous competion – is a way to stimulate the industry. Treating high tech infrastructure as a monopoly public utility is a guaranteed road to failure. Every time I hear the traffic reports talking about the continued closure of the intersection of Jane and Highway 7, it serves as a reminder that our governments already do a lousy job maintaining civil works like sewers and streets. Why would we want to trust government with the provision of critical electronic infrastructure?

Sure, government does a good job up front. It is the ongoing capacity planning and maintenance that are just plain underfunded. It’s only natural. Initial installations are sexy and make for good photo ops. Maintenance is boring.

A federal public servant that I respect once told me that governments typically do a lousy job of picking winners. If Toronto wants a strong ICT sector, it has to foster an environment that creates the right incentives for businesses to do it on its own.

Like a best practice for management, it seems to me that the key to fostering a stimulating, energized and creative work environment for ICT in Toronto is for government to clear roadblocks and then get out of the way while the industry does its own thing.

Rather than knocking on the doors of the existing private sector success stories and asking for them to contribute to pay for this new ICT initiative, let’s hope the mayor is receptive to just standing on the sidelines and cheering them on to do their own thing. Sometimes, the best form of stimulus may cost nothing at all.

It’s a deal… Lucent and Alcatel have tied the knot and will be merging to form a US$25B telecom giant.

The merged company, to be headed up by Lucent president Pat Russo will be cutting about 8800 jobs – 10% of the current workforce – and some of those are possibly going to be in Ottawa. Although on one hand, the public statements boast that the combined company will have “The industry’s premier R&D; capabilities, including Bell Labs, with 26,100 R&D engineers and scientists throughout the world“, the press release indicates that savings will:

Leveraging R&D; across a larger base could mean that Lucatel or Alcacent will be looking at labs that duplicate efforts. The companies are both strong players in DSL – watch for Bell Labs to come out on top in any turf battle, given that Russo is the CEO. Alcatel has a large presence in Canada, with both sales, operations and research – thanks to its acquisition of Newbridge nearly 6 years ago.

Bell Labs will continue to be headquartered in New Jersey and Lucent is preserving certain corporate structures in order to continue to fulfill US Government obligations for some strategic contracts. Other corporate structures are also being created to fulfill French requirements.

There is an opportunity for Canada to grow its role in the combined company as global mandates are defined during the integration activities. It seems to me that some locations will be winners and some will be losers. Winners will perform R&D; for the combined entity and will see their budgets (and staff counts) grow; losers will see some of their staff offered jobs elsewhere and the rest let go.

Our governments – federal and provincial – have created incentives to keep auto and airplane assembly lines open. We’ll soon see where telecom R&D;, Ottawa’s technology core, fits into Canada’s industrial priorities.

MTS Allstream was quick to trash the report of the Telecom Policy Review panel, calling it “Hopelessly Complicated and Impractical.”

Let’s look at this statement and parse it.

“In the near term, we see no practical effect on our business. ” Correct. Of course, even if MTS Allstream loved the report, it would have no effect on anybody in the near term. It is a report, not a CRTC Decision, not a new Telecom Act, etc.

“Longer term, the recommendations appear hopelessly complicated and impractical.” To start with, let’s remember that this is a panel whose mandate was:

With these objectives, we had to be expecting something more substantial than a weekend school report!

The report is 400 pages long and it uses detailed technical language. Not just geek technical terms, but economist terms, lawyer terms and social policy terminology. Of course the report is complicated. Hopelessly though?

After you get past the first look, you realize that the report contains step-by-step instructions on how to do it. How to build a 21st century policy and regulatory framework.

There are precise wording changes recommended for various sections of the Telecom Act. Details on how to open up foreign ownership. Recommendations for follow-up work to cover the issues that were beyond the scope of this panel. Complicated? Yes. Impractical? Hardly.

“They appear based on the rather implausible notion that greater bureaucracy will result in greater efficiency for Canadian consumers and businesses.” My initial read of the report led me to a similar set of thoughts. Why create new arms of government if we are trying to streamline regulation and paperwork? How is the creation of bureaucracy consistent with migration to market forces?

More than most companies, MTS Allstream should be familiar with the disruptive benefits of reorganization once in a while. Could the Telecommunications Consumer Agency exist within today’s CRTC. I think so. But those are not the major issues.

I am certain that the heartburn being felt at MTS Allstream has little to do with overall complexity and bureaucracy. Their pain is summarized in the opening statement from the panel:

In other words, the panel believes in facilities-based competition, just like the CRTC has been saying. MTS is heavily reliant on its competitors for access. It has been relying on regulated wholesale rates rather than build its own access. In fact, it sold off its holdings in Inukshuk, the one opportunity to economically control its own destiny.

MTS Allstream: Be grateful for the recommendations to relax foreign ownership restrictions. It may be just the thing to get you back on your feet.

The Toronto Tourism and Economic Development folks must be happy today. Toronto Hydro Telecom announced that it plans to build a WiFi umbrella over the downtown core of Toronto. Toronto joins an elite club of major world cities, including San Francisco, Philadelphia, London, Ottawa and Whistler.

There are lots of questions that can be asked about this project:

• Should the city be competing against the private sector? Since Bell and Rogers pay municipal taxes and both have lots of employees in Toronto paying taxes, do you really want to have the city own a company that will compete against these corporate citizens?
• Who are the beneficiaries of this service? This service isn’t targetting the Toronto Housing Projects or disenfranchised youths at Jane and Finch; it is blanketing the downtown core, including the bank towers. Is this trying to help make it easier for already rich to make those new car payments?
• What about advanced services? Like competitive Voice over WiFi IP to compete against high cellular rates? Things like smart meter reading? Is there going to be an announcement from the electricity side of Toronto Hydro that they have a plan to leverage this new capability to allow time of day incentives for energy conservation?

But there are some very important answers:

• The high speed market isn’t competitive enough. Both Rogers and Bell have recently announced price increases. Toronto Hydro may help to discipline the pricing from the current duopoly.
• Other cities are building these networks. That isn’t a good enough reason on its own (just like your mother used to say “and if your friends were jumping off a bridge would you do that too?”). But, the market is pretty fierce for convention recruiting, high tech jobs and other drivers of municipal economic development. A city WiFi network is the kind of ‘amenity’ that people will come to expect. It doesn’t hurt for Toronto to be a leader, not a follower, in offering this kind of service. Premium soap and shampoo used to be amenities reserved for upgraded rooms in superior hotels. Now we have come to expect hair dryers, plush bathrobes and ironing boards in anything above Red Roof Inns. If WiFi helps land one giant convention per year, it will pay for itself many times over.

As Industry Canada has said, consolidation has left the Canadian Telecom industry feeling a little too comfortable. It may take some municipal activity like Toronto Hydro Telecom’s WiFi Zone to shake things up.