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Later this week we’ll be marking the 30th anniversary of the CRTC’s landmark decision enabling competition in Canada’s telecommunications market.

Telecom Decision CRTC 92-12: Competition In The Provision Of Public Long Distance Voice Telephone Services And Related Resale And Sharing Issues, was released June 12, 1992. The regulatory process began with an application filed by Unitel in May of 1990. Regional public hearings took place across the country, and the main hearing, with sworn testimony and cross examination by all parties took place over 11 weeks, from April 15 to July 5, 1991.

Competition had been rejected by the CRTC previously. The benefits of a competitive marketplace for telecommunication had to be proved to be in the public interest. Competition didn’t arrive in Canadian telecom by government fiat; we had to demonstrate the benefits.

At the time, competitive telecom was relatively new in a very limited number of countries. I was recruited to return to Canada after spending a half dozen years in the US, following the 1984 break-up of AT&T. My job was to define the interconnection architecture and build the network capital investment plans to transform Canada’s telegram company into a competitive digital communications company. In the first couple weeks, I rewrote the company’s interconnect plan, so new entrants would interconnect as peers, not customers.

Presenting the new plan at a board meeting a few weeks later, I met Ted Rogers and CP’s Bill Stinson for the first time and the new interconnection plan was put through the wringer. My boss motioned for me to sit down, but the lawyers I had been working were sitting in the back of the room and they wanted me to keep going. Later, I was told that I was being tested. As we packed up, Ted came over and told me it was a really good presentation and he looked forward to hearing more the next month. My boss said. “If that was a good presentation, what do you consider to be a bad one?” As he walked back into the boardroom, Ted answered “Why, you know what a bad presentation looks like!”

Over the course of the next 18 months, we assembled volumes of evidence, and answered thousands of interrogatories. My personal briefing book was a 4 inch binder with 33 tabs. [As an aside, I ran across it recently and would be happy to donate it to a resource library, if anyone is interested.] We carried 2 shelves of back-up binders into the hearing room. And that was just for the network panel.

For the oral hearing phase, I was part of the opening panel, on the witness stand for the first week testifying about the interconnection architecture. The strategy was to put the network panel up first, based on a thought that it would be boring and chase the story off the news so that we could get down to the serious policy issues over the following 10 weeks. Personally, I thought we were more exciting than the economists!

It was a different era. Sworn testimony – I was affirmed. Full cross examination, without the ability to consult with our lawyers once on the stand. The Minto Suites was home to many of the out-of-town teams. Long days at the hearing on the Quebec side of the river would transition to long evenings, usually starting off with the sauteed mushrooms and refreshments at the hotel’s street level bar/restaurant.

Someday, I really should pull together more stories from those days.

A memorable moment from the hearing came when I finished testifying. I was chatting with our corporate head of law and the legal chief at Bell came over and complimented our panel. I was shocked. A couple days earlier, he was doing his best to trip us up and here he was telling our lawyer what a good job we had done. During the following week, SaskTel’s outside counsel, the late Willie Grieve, caught up with me at our hotel and asked if I could help him understand how our proposal worked. We were developing a model of “co-opetition”.

Those personal interactions indelibly reshaped my understanding of the regulatory process. Inside the hearing room, we could (and we would) vigorously advocate our positions, while still maintaining courteous, professional and even friendly relationships with the other team. It is like the way opposing teams line up to shake hands at the end of a hockey playoff series, demonstrating respect for their industry colleagues.

Those professional relationships were important as we moved into implementation. Every so often, an issue needed an escalation to avoid (or mitigate) a service affecting incident. It helped to have a relationship with my counterpart on “the opposing team.” Sometimes, it is helpful to resolve issues without resorting to the regulator.

Scratch that. It is almost always preferable to resolve issues without resorting to a regulatory filing. I think there is a lesson in there for many of today’s industry participants.

I wrote a nostalgic post 5 years ago that you may find to be worth a fresh look.

Last week, I contacted the members of my small but high energy team of bright young engineers who had all been recruited from Nortel and Bell Labs to join what was then called CNCP. All of them were under 30, reporting to me when I still had a full head of dark hair at the age of 32. It was a memorable time together, working ridiculously long hours, creating bonds that keep us connected 30 years later. I am proud of what we accomplished and the leadership roles in the global telecom sector that each member of our team assumed after we moved on from Unitel.

There were notable industry leaders who had emerged from among the CRTC staff involved in that proceeding. But that is another story for another time.

As I have mentioned before, I will sometimes be driving on a highway here in Canada, video-chatting with my daughter who is on a high-speed commuter train halfway around the world, without either of us having to think about the cost. I don’t ever take that for granted. The miracle of connectedness is possible thanks to more than a century of investment and innovation by some people with whom I am honoured to have worked.

Ubiquitous affordable communications haven’t always been the norm.

During the regional CRTC hearings in 1991, we divided up the various provincial and territorial capitals in order to have a company representative sit with our lawyer, to listen as members of the public delivered comments to a mini-panel of Commissioners. I attended the Vancouver and Whitehorse hearings on the company’s behalf. As an aside, let me note that the weather in Vancouver in February is a little milder than Whitehorse, but I am not sure have seen any place prettier than the Yukon in Winter. There wasn’t a lot of air connectivity to Whitehorse so we ended up spending a few days there for a half-day hearing. After settling into my hotel room, I remember walking into the lobby where our lawyer was chatting with a CRTC Commissioner before we all set out for adventure during the few hours of daylight. I opened the conversation saying “did you see the long distance phone rates listed in the front pages of the Whitehorse phone book?” Surprisingly, neither of them knew that it cost around $3 per minute to call Toronto. In 1991, that would have taken an hour’s work at minimum wage to pay for a two minute call.

We changed that for most Canadians.

Thirty years ago this coming Sunday, Canada created the regulatory framework that enables today’s competitive environment for communications connectivity.

I’ll be thinking of my colleagues and friends among those who were involved, from all sides of the proceeding, applicants, respondents, intervenors and the Commission. I invite you to add your reflections in the comments section.

Congratulations on the past 30 years. As Ted Rogers would say, “the best is yet to come.”

The public interest for telecommunications is multi-dimensional. Although some lobbyists seem to focus solely on lower prices, government policy needs to balance other factors, like investment in increased coverage, new technology and services, and quality.

Last Thursday, when Minister François-Philippe Champagne announced a new policy direction, there were 3 “associated links” in the press release:

• Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy
• Backgrounder: Summary of the Government of Canada’s new proposed policy direction to the CRTC
• Backgrounder: Renewing Canada’s approach to Telecommunications Policy: Context for Action

Much of the focus of media coverage was on the proposed Policy Direction as well as the disposition of the wholesale rates appeal:

We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability. The wholesale rates decision made by the CRTC in 2021 is an attempt to correct errors made in 2019, and it makes permanent the rates that have been in force since 2016. The decision provides stability, and the government has determined that it will not alter this decision.

My initial impressions were captured in a blog post, “A new direction for Canadian telecom”.

I noticed that many of the news articles cited language that appeared in the Policy Direction Backgrounder, as opposed to the more moderate language found in the actual draft Order.

There seemed to be less attention on the Context Backgrounder, and as has become usual, that is where I like to focus.

I have talked about a theme of balance that I think continues from Minister Navdeep Bains era 5 years ago, balancing Quality, Coverage And Affordable Prices. A few weeks ago, I observed, “In its rejection of an appeal on the CRTC’s Review of Wireless Services, just last month Cabinet said: “the Governor in Council considers that the Commission’s decision appropriately balances investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers”.”

Nearly two years ago, Minister Bains said Canada’s Future Depends on Connectivity. Generally, last week’s telecom policy announcement promises a framework that continues to balance consumer interests, including the incentives for service providers to make investments that deliver quality services, available to all Canadians.

Policy consistency is important. The context backgrounder leads with details of how these policies have delivered benefits for Canadian consumers:

Canada has benefited from very high investment levels over time, with the private sector investing $11.4 billion in 2020. Canada has consistently been above the Organisation for Economic Co-operation and Development (OECD) average. For example, in Canada the share of telecommunications revenues invested in capital expenditures over time was 30-50% above the OECD average. This has led to high quality telecommunications networks. For example, according to Ookla’s March 2022 Global SpeedTest, Canada ranked 16th out of 142 countries for median mobile speeds, ahead of all members of the G7, and 17th out of 182 countries for median fixed broadband speeds ahead of all members of the G7, except the USA and Japan.

When it comes to the household availability of full fibre networks, in 2020 the household coverage in Canada (49%) was ahead of the US (42%), Australia (16%), UK (18%), Germany (11%), and Italy (34%) and the EU average of 43%. Similarly, when factoring in cable networks, coverage of the faster speeds of 100 Mbps and 1 Gbps are available to 87% and 76% of homes compared to 76% and 51% in European Union countries. Data from OpenSignal shows strong speeds for new Fifth generation (5G) services with Canada ranking 4th in 2021, strong historical coverage of 4G services, and for more specialized application metrics Canadian operators were not among global leaders but above the sample average. Fibre and new 5G services continue to roll out and ongoing investments will ensure Canadians benefit from these and future technologies as they are introduced and deployed.

The subsequent paragraphs, talking about rural service gaps, demonstrate an understanding and appreciation of the challenging aspects of business cases to build in parts of Canada.

The background document provides a market overview and helps to understand the context in which policies are being formed, “promoting more competition, universal access and a more consumer-oriented telecommunications sector in Canada.”

Minister Champagne said “We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability.”

This reference to balance, coupled with the Policy Direction’s requirement for predictability, provide important messages of policy consistency.

Have we seen the end of Calvinball in Canadian telecom regulation?

This post was originally published on National Newswatch, May 25, 2022.

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Often, it can be a challenge to define a problem without specifying a solution. In many cases, we find it easier to think in terms of familiar solutions. Unfortunately, at a minimum, doing so limits the degrees of freedom for developing more creative solutions; or indeed, it could result in not solving the root problem, like a doctor treating a fever without fully understanding the underlying disease.

I have written before about a systems engineering approach to broadband. “Many people say that they need nails when what they really need is to hold two pieces of wood together. The difference between defining problems in terms of requirements versus preordaining a solution.”

Last weekend, I read an OpEd in the Toronto Star, saying “It’s time for Toronto to create an affordable high-speed internet network.” The article disturbed me, and not just because of its revisionist history of the Connecting Families program. The article is a classic example of jumping right to a “solution” without fully considering all aspects of the problem.

The article concludes with, “If the pandemic has taught us anything, it is the dire need for affordable, high-speed internet — for all.” The concluding statement is a more concise requirements definition, but still falls short.

Our target should be aiming for getting everyone online. Just 3 words, simple and easy to remember: “Get everyone online.”

Broadband for all, as some have campaigned, isn’t enough. The CRTC’s basic service objective, for all Canadians to have access to a high-speed broadband connection, is the right target for service providers, but it falls short as a national digital policy objective, because it addresses access but ignores adoption.

Like leading a horse to water, it isn’t enough to have a broadband connection available to every household. We should be aiming to connect every household, and connect every member of every household. More than just getting broadband access to every doorstep, we need to find ways to increase rates of adoption, especially among disadvantaged groups.

Unfortunately, the Star article’s proposal “to create a publicly owned and managed municipal broadband network” won’t solve the real problem. Building a duplicate municipal broadband network is an overly simplistic, one-dimensional approach that will be ineffective in addressing a complex multi-dimensional problem.

With almost a decade of experience in targeted broadband offerings, there is a good pool of experience from which we should develop a greater understanding of what it will take to get all Canadians online.

For example, we have learned that lower broadband prices aren’t enough to get everyone to connect. As I wrote in “The broadband divide’s little secret”, “The mistake that emerges from a lack of good economic and social data analysis is that governments are tempted to apply the wrong solution to solve the wrong problem.”

Bridging the income divide will take more than just lower prices for broadband and devices. We need to develop digital literacy skills and build trust among those who aren’t already comfortable online. We need to continue researching and delivering solutions to address all of the factors that are inhibiting adoption. These are important roles for local governments and agencies.

The objective, getting everyone online, can be stated simply, but delivering the solutions will be more complex.

Can we start with a common agreement that our national target has to reach beyond the CRTC’s basic service objective? Building broadband access is a necessary, but insufficient condition for a digitally connected Canada.

Get everyone online.

We have seen the expression “sustainable competition” used frequently in Canadian telecommunications policy circles.

In its rejection of an appeal on the CRTC’s Review of Wireless Services, just last month Cabinet said: “the Governor in Council considers that the Commission’s decision appropriately balances investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers”.

The terms “sustainable” and variations like “sustainability” appear 29 times in that CRTC decision.

Which brings us to the Competition Bureau filing with the Competition Tribunal to block the merger of Rogers and Shaw.

As reported by Bloomberg, the application is somewhat “baffling”. According to the Bureau, the merger “is likely to prevent or lessen competition substantially in Wireless Services in Ontario, Alberta and British Columbia.” Further, the Bureau says “divestitures proposed by the merging parties are not likely to alleviate the substantial prevention or lessening of competition from the Proposed Transaction.”

What causes many analysts to scratch our heads is an implicit presumption in the Bureau’s arguments that ending the merger will result in Shaw continuing to invest in operating its wireless business.

The lede in the Bloomberg story captures the issue. “The antitrust case against Rogers Communications Inc.’s takeover of a rival is thousands of pages long but comes down to one core idea: the company it’s buying is too good. Analysts don’t see it that way.”

Effectively, the Competition Bureau appears to be saying that Shaw would never be allowed to sell Freedom Mobile, because there are synergies with Shaw’s wireline business, even though the mobile business wasn’t originally integrated with a wireline company when it launched or when Shaw bought it. That seems pretty extreme. Earlier this week, BMO Capital wrote “We believe an outright rejection of this deal would not satisfy the government’s position of a four-player market (i.e., Shaw will not keep funding wireless, that’s why they sold)”.

The Bloomberg article notes “while Freedom may be a tough competitor, analysts question how healthy it really is. Shaw is struggling to generate much cash flow from it.”

As I wrote on Monday, Brad Shaw told the Parliamentary Industry Committee that the status quo is not an option, as the level of investment required for wireless was beyond the ability of Shaw to undertake. While the Competition Bureau may be correct in saying that Freedom contributed to competition in the wireless market, it does not say how Freedom can sustain its past level of competition if the merger is blocked. Shaw has clearly concluded that it cannot.

This is not a unique occurrence. Market consolidation has been happening, or is under discussion, in the U.S., Europe, the UK, Asia and Australia. One of the reasons for consolidation is that remaining competitive is an expensive proposition. GSMA estimates that the deployment and ongoing costs of 5G will be up to 71% more expensive than previous network generations. If Freedom is to remain a competitive force, additional financial resources are required.

Blocking the merger does not maintain Freedom’s contribution to competition in the marketplace; it weakens it.

New investors have apparently stepped up, enabling the “merging parties” to propose a divestiture. The multi-billion dollar purchase price being reported in the media implies that these potential buyers have developed business plans that are attractive to their investors and are willing to undertake the investments necessary to compete.

The outcome of the merger review process, like the CRTC and Cabinet reviews of wireless services, needs to “balance investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers.”

The Competition Bureau’s position disrupts that balance, risking the long-term sustainability of all market participants.

Last week, MediaSmarts released “From Access to Engagement: Building a Digital Media Literacy Strategy for Canada” [pdf, 2.9MB].

The report is an output from a symposium held in February. MediaSmarts has been advocating for digital literacy for more than 15 years, since its earlier incarnation as the Media Awareness Network, and you will see references to digital literacy on this blog dating back almost as long.

A national strategy will provide experts, advocates and service providers in the digital media literacy field with a unified but flexible approach for preventing and responding to online harms through education and critical skills development. At the same time, people living in Canada will be empowered to use, understand, create and engage with digital technology and digital media, which is at the heart of active digital citizenship and innovation.

Unfortunately, Canada doesn’t have an accurate baseline to measure our digital media literacy skills, unlike some of our closest trading partners, such as the United States, the United Kingdom, or Australia. As I recently noted, digital literacy appears to be a significant inhibitor in increasing adoption of internet connectivity among vulnerable populations eligible for affordable broadband and devices. The report notes “that when it comes to digital participation, access to technology and training is crucial for historically marginalized people in Canada, including Indigenous communities, people living in poverty, newcomers and people with disabilities.”

A recent article in Policy Options by the report’s authors observed “Access alone cannot close the digital divide.”

Digital literacy is more than technological know-how. It includes various ethical, social and reflective practices essential to developing online resilience and ethical digital citizenship. We must then embed these practices in our work, learning and daily life. Approaches to digital literacy that overemphasize access, hard technological skills and risk-avoidance constrain rather than bolster user agency. The risk is that while most people do not need coaxing to use digital technology, many users become deeply immersed in online life without the necessary digital literacy skills and supports.

Let’s take a look at that last sentence. I would agree that “most people do not need coaxing to use digital technology”, but we also need to consider the challenge of digital literacy training for those who do need coaxing. While the number of folks who don’t use internet is closing, last week’s release from Statistics Canada [Full Report: pdf, 820KB] shows there is still over-representation of some groups that are getting left behind. Statistics Canada data identifies age and education among the most significant factors impacting internet skills.

We are making progress. Statistics Canada reports “Fewer Canadians are on the ‘have not’ side of the digital divide”.

From 2018 to 2020, the shares of Canadians identified as either Non-users or Basic users of the internet and digital technologies declined by almost 5 percentage points, from 23.8% to 18.9%. This represented a shift of almost 1.4 million Canadians from the ‘have-not’ to the ‘have’ side of the digital divide.

Leaders of the various low-income broadband programs (Connecting Families, Connected for Success, Internet for Good) may be able to provide valuable input to help inform the development of Canada’s national digital literacy strategy on factors influencing non-adoption of internet connectivity. As I wrote last year, “we have learned that getting people online isn’t just a matter of price.”

Of those who do not currently use the internet, a significant portion attribute their lack of online activity to issues of digital literacy and concern for cybersecurity.

Access alone cannot close the digital divide.

Canada needs to place greater emphasis on development of digital literacy among users and non-users alike.