Search Results for: calvinball

On October 3, the CRTC concluded the oral hearing portion of its “Review of wholesale mobile wireless services” with a statement: “as stated in the Notice of Consultation, we expect to issue a decision within four months of the close of the record.”

The record closed October 20, which would have made February 20, 2015, last Friday, the self-imposed deadline for the CRTC – coincidentally, the one-year anniversary of the original Public Notice.

When will the CRTC release its decision?

There are a number of issues being reviewed:

• Should the CRTC regulate wholesale roaming rates?
• If so, at what level?
• Should the CRTC mandate resale to enable MVNO – mobile virtual network operators?

On this last point, the CRTC’s work should be pretty easy. Consistently, Industry Canada has rejected calls to mandate resale as a “condition of license” for mobile operators.

In the original AWS spectrum auction that gave rise to today’s competitive entrants such as Wind Mobile, Mobilicity, Videotron and Eastlink, Industry Canada created license conditions that stated: “Roaming as provided for in this condition does not include resale.”

Since that time, Industry Canada has had a number of reviews of its license conditions and associated network infrastructure sharing rules, each time remaining consistent. For example, in its March 2013 “CPC-2-0-17 — Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements“, Industry Canada determined:

A carrier must therefore be offering service on its own network before its subscribers may benefit from roaming on another network, thus it does not include resale.

At the same time, Industry Canada’s perspective has been that “Nothing in the policy, however, is intended to limit the ability of carriers to conclude commercial agreements that are not mandated by this policy.”

Next Tuesday at noon, just one week from now, Canada’s wireless industry will be placing multi-billion dollar bids on spectrum, having built business plans under the December 18, 2014 Framework released by Industry Canada. At that time, Industry Canada reaffirmed the “conditions of license” with no mandated resale.

The CRTC’s wholesale wireless decision should have been released already (it was promised to be out by last Friday), allowing carriers to adjust their business models in advance of the single bid submission deadline.

A fundamental change in the regulatory framework, such as the CRTC mandating resale, could mark the return of Calvinball to Canada’s wireless sector.

There is already lots to talk about at The 2015 Canadian Telecom Summit, June 1-3 in Toronto. Early bird rates are available through Saturday February 28. Have you registered yet?

As I have explained before, Calvinball is a game that has rules, but the rules keep changing.

Here is how Wikipedia describes the game, which was introduced about 20 years ago in the comic strip Calvin and Hobbes:

The only consistent rule is that Calvinball may never be played with the same rules twice. Scoring is also arbitrary, with Hobbes reporting scores of “Q to 12″ and “oogy to boogy.” The only recognizable sports Calvinball is similar to are the ones that it emulates (i.e., a cross between croquet, polo, badminton, capture the flag, and volleyball.) Equipment includes a volleyball (the eponymous “Calvinball”), a soccer ball, a croquet set, a badminton set, assorted flags, bags, signs, and a hobby horse. Other things are included as needed, such as a bucket of ice-cold water, a water balloon, and various songs and poetry. Players also wear masks that resemble blindfolds with holes for the eyes. When Rosalyn asked Calvin what the reason for the requirement was, Calvin responded, “Sorry, no one’s allowed to question the masks.”

For the past 4 years, I have used Calvinball to describe Canada’s communications policy, such as here, here, here and here.

The government has been advertising that it welcomes foreign investment in telecommunications; foreign investment apparently forms a key part of the government’s strategy to encourage competition in the sector. Yet, this evening, the government turned down the sale by Manitoba Telecom (MTS) of Allstream to Accelero Capital for “national security reasons,” having taken four and a half months to make a decision. According to MTS, the government “rejected an offer from MTS and Accelero to take whatever actions are necessary to address the government’s concerns.”

Keep in mind that the principals of Accelero are well known to the government. These are the same people that were permitted to buy spectrum and operate WIND Mobile. Indeed, the government seemed to bend over backwards to approve their entry into the market, overturning a CRTC decision that denied WIND Mobile’s right to operate (prior to the liberalization of foreign investment rules).

The Government says:

The Government of Canada has concluded its review of Accelero Capital Holdings’ proposed acquisition of the Allstream division of Manitoba Telecom Services Inc. (MTS) under the national security provisions of the Investment Canada Act. The result of this review is that the transaction will not proceed.

MTS Allstream operates a national fibre optic network that provides critical telecommunications services to businesses and governments, including the Government of Canada.

Just last December, Allstream announced that it had been awarded a multi-year contract to manage theMPLS network, for Shared Services Canada, the Government of Canada department responsible for providing telecommunication services, email and data centres. Allstream also appears to be a major supplier to Canada’s civil aviation navigation services provider, NAV Canada, among other government sector clients.

This evening’s government press release seems to be saying that foreign companies will not be permitted to acquire telecom companies that are providing services to the Government of Canada.

As MTS states,

the transaction would have, among other things:

• contributed to increased competition in Canada’s telecommunications sector;
• sent a strong message that Canada’s telecommunications sector is, in fact, open to foreign investment;
• enabled Allstream to accelerate the introduction of innovative products to increase the productivity of Canadian businesses;
• provided MTS the capital necessary to increase its investment in Manitoba’s telecom infrastructure, such as fibre-to-the-home for rural Manitobans; and
• resulted in $165 million of funding for MTS pension plans benefitting more than 10,000 Plan members.

Will MTS still be in a financial position to bid in the 700 MHz auction? Will it be able to continue its FTTH program, introducing some of the world’s most advanced services and competitive TV distribution in small rural Manitoba communities? What will become of Allstream and its need for continued capital investment? Accelero said that it had planned to inject an additional $300M into Allstream “to increase Allstream’s competitiveness and accelerate the introduction of innovative new products to increase the productivity of Canadian small, medium and enterprise businesses”.

The government’s “Fact versus Fiction” page talks about concerns that Canadians might have dealing with foreign owned telecommunications companies. One of its “Fictions” is “Your privacy is at risk if you choose a foreign cell phone provider” with a response “FACT: Canada has strong privacy laws to ensure our citizens’ personal information is safeguarded. These laws apply equally to all organizations that collect such information in Canada. The laws prevent any provider from disclosing personal information except with consent or when permissible by Canadian law.”

Maybe the government doesn’t have as much faith in dealing with foreign owned telecom service providers as it wants you to have.

Industry Minister Tony Clement gave parties until today to submit comments on the CRTC’s finding last month that Globalive does not comply with Canadian ownership requirements under the Telecom Act.

Why do I keep thinking of Calvinball when I read about the continuing twists and turns regarding the rules for the licensees from our last mobile spectrum auction?

Here is how Wikipedia describes the game, which was introduced about 20 years ago in the comic strip Calvin and Hobbes:

The only consistent rule is that Calvinball may never be played with the same rules twice. Scoring is also arbitrary, with Hobbes reporting scores of “Q to 12” and “oogy to boogy.” The only recognizable sports Calvinball is similar to are the ones that it emulates (i.e., a cross between croquet, polo, badminton, capture the flag, and volleyball.) Equipment includes a volleyball (the eponymous “Calvinball”), a soccer ball, a croquet set, a badminton set, assorted flags, bags, signs, and a hobby horse. Other things are included as needed, such as a bucket of ice-cold water, a water balloon, and various songs and poetry. Players also wear masks that resemble blindfolds with holes for the eyes. When Rosalyn asked Calvin what the reason for the requirement was, Calvin responded, “Sorry, no one’s allowed to question the masks.”

When asked how to play, creator Bill Watterson said, “It’s pretty simple: you make up the rules as you go.”

Calvinball is not the kind of game that the investment community will want to play. The government agencies (CRTC and Industry Canada) can’t be seen making up the rules as we go. That is why I told the Canadian Press that I don’t think the CRTC decision will be overturned.

Still, there is one aspect that the CRTC left a door open for policy guidance in its decision, as I suggested last month. There was an ambiguity in Paragraph 118 of the Decision in respect of the allowable amount of debt that could be held by a non-Canadian company.

The Industry Minister might pronounce on this particular point – providing clarity and flexibility – without tearing apart the integrity of foreign ownership restrictions.

Globalive is one of a number of new mobile spectrum license holders. Industry Canada needs to ensure that the rules are clear for all of the industry participants so that we can get on with the game.

As I was marking these days of reflection in the Jewish calendar, I found myself asking, where is the vision for Canada’s national digital strategy?

Sure, there is a Digital Charter, a pronouncement heavy on market intervention, following the tradition theme of “Tax it, regulate it, subsidize it”. But, the Digital Charter is light on how we drive increased national productivity. Where is the strategic vision?

When I look at the official mandate for the responsible federal agency, I read “Innovation, Science and Economic Development Canada’s (ISED) mission is to foster a growing, competitive and knowledge-based Canadian economy.” The department says its “raison d’être” is to work “with Canadians in all areas of the economy and in all parts of the country to improve conditions for investment, enhance Canada’s innovation performance, increase Canada’s share of global trade, and build a fair, efficient and competitive marketplace.”

It sounds good so far, but what is the strategy to achieve these bold objectives? It is somewhat trite to say that the department’s “raison d’être” – its very reason for being – is to improve investment conditions, enhance innovation performance, and build a fair, efficient and competitive marketplace.

How does the department plan to do that? Indeed, considering the current government has been in power for 9 years, how did the department plan to do that? Where is the strategy that has been guiding them?

Regulation in the absence of an overall strategic vision can be harmful. In rejecting Senate Bill 1047, the AI safety legislation, California Governor Gavin Newsom wrote: “Given the stakes – protecting against actual threats without unnecessarily thwarting the promise of this technology to advance the public good – we must get this right.” Arguments were made that the provisions of SB 1047 are too broad and could stifle innovation, and could hinder AI’s development itself.

I took a look at ISED’s Plans and Reports web page. There is a link to a “Science and Technology Strategy” and another link to “Canada’s S&T strategy”. The “Science and Technology Strategy” page is now archived. It dates back to the 2007, when the Conservatives were in power. The “Canada’s S&T strategy” also dates back to the Conservative era, publishing a report in 2014 (“Seizing Canada’s Moment: Moving Forward in Science, Technology and Innovation 2014”), and launching a consultation (“Developing a Digital Research Infrastructure Strategy”). The Digital Charter sets out 10 principles. Are we doing enough to tie these to the departmental raison d’être, to “improve investment conditions, enhance innovation performance, and build a fair, efficient and competitive marketplace.”

A lot of these government consultations produce reports that sit on shelves. But, isn’t it helpful to have a somewhat official strategy point of reference to guide the development of more specific objectives and tactics? When handing out billions of dollars in government subsidies, shouldn’t the Minister be able to point to a strategy document to justify certain priorities over others?

This isn’t the first time that I have come back from Rosh Hashana with broad policy reflections. Three years ago, I wrote “How did we get here? How do we move forward?” and wrote:

So, how did we get here?

A number of years ago, in “Digging ditches and digital policy”, I cited a paper from the Institute for Research in Public Policy that said “Like other countries, Canada is once again engaging actively and more openly in industrial policy. In fact, it has a profusion of industrial policies, what it lacks is a strategy.”

No clear strategy. No clear objectives. No scorecard for measuring progress.

What are we trying to accomplish? How do we measure success? As I have said many times [here and here], I would like to see us start with clear objectives: “Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.”

How do we celebrate success in digital policy, if we aren’t clear about what we are trying to do?

How do we move forward?

If we want to create appropriate incentives for private sector investment, we can’t keep changing the rules (see: Calvinball). A recent essay on The Hub asks “what incentives do firms have to incur the risk and costs of investment in new network infrastructure if the government can later unilaterally grant access to their competitors at rates determined by regulators?” As the authors write, “The goal should be to create the conditions for investment, innovation, and technological development rather than micromanage the market to produce a particular number of market participants.”

Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to those objectives.

A few weeks ago, I wrote about competing visions for a digital future being laid out in the US. Where is the competing vision from His Majesty’s Loyal Opposition, Canada’s apparent government-in-waiting?

At some point, the Opposition Critics have become known as Shadow Ministers. Being a critic is important in a Westminister-style government. It is their role to hold the Minister to account. But, it is a lot easier to criticize than to develop policy and strategies from scratch. A Canadian election is coming at some point in the next year, and all signs point to a Conservative majority. Casting stones is a lot easier than gathering them together to build something. It’s even harder to build something that will endure.

For the past 9 years in opposition, we have heard what the Conservatives won’t do. It is time to transition from critics to leadership. Where is the vision for Canada’s digital future?

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.