THE BLOG

Canada's Internet Needs to Join the 21st Century

11/21/2014 05:56 EST | Updated 01/21/2015 05:59 EST
ROBYN BECK via Getty Images
A thumbs up or 'Like' icon at the Facebook main campus in Menlo Park, California, May 15, 2012. Facebook, the world's most popular internet social network, expects to raise USD $12.1 billion in what will be Silicon Valley's largest-ever initial public offering (IPO) later this week. AFP PHOTO / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)

In the beginning of November, CRTC Chairman JP Blais delivered a comprehensive speech to the Vancouver Board of Trade. The topic was a familiar one: trust the regulator to succeed in its quest to seek out, define, and ultimately to defend the public interest. Indeed, Mr. Blais has made his goal clear from the beginning of his term as Chairman: "We know we have some work to do to gain the trust of Canadians,"he said in a 2012 interview; "we can do better, and we will do better - to earn their trust, every day, in every action and in every decision." [1]

Dear Prime Minister, Ministers, and CRTC Chairman,

Mr. Blais, it's clear that you've been taking actions to gain our trust. Under your leadership, the CRTC scrutinized the Bell-Astral deal closely, implemented the wireless code of conduct, and most recently it banned 30-day cancellation policies, among numerous other gestures. You're off to a good start, but there is much more work to be done.

You must remain vigilant -- since acquiring Astral, Bell has refused to share content with independent providers [2], the wireless companies used the code of conduct as an excuse to raise rates (in the end blaming the CRTC for the hikes)[3], and third party service providers are still being treated as second-class customers by the infrastructure owners upon whom they rely for access [4]. These are just some of the persistent problems that remain to be addressed. To the public, it appears that the commission is playing a game of regulatory whack-a-mole with the companies it oversees, knocking down one breach of the rules only to see two more pop up in short order [5].

Canadians are expecting real changes as the CRTC conducts three momentous hearings: one examining the broadcasting system, one looking into mobile wireless, and the last focusing on the structure of the market for wired telecommunication services. Although we recognize that the CRTC is actively engaged in virtually every facet of Canada's communications systems [6], the outcome of these three proceedings will by and large determine the overarching dynamic between the regulator and industry, and the communication services that Canadians will have access to for the foreseeable future. The gravity of these proceedings can hardly be overstated.

While it's certainly true that the technologies we use and the ways in which we use them have changed dramatically over the years, one thing that has remained remarkably constant is the importance Canadians place on our communications systems. It is not only crucial to recognize the central role that communications play in our lives, but also to ensure that the often underrepresented interests of Canadian individuals, families, businesses, and public services are at the forefront of the commission's deliberations as it strikes out a path of development for the 21st century.

Mr. Blais, it is heartening to see the premium you place on these important concerns, and on the need for intelligent, evidence-based decision making. However, we are concerned with a number of obstacles that are standing in the way of progress. Of these there are chiefly two: the disproportionate power wielded by the incumbent facilities owners, and the conspicuous absence of clear, responsible leadership and support from our elected representatives.

Oligopoly control of telecommunications

One of the main challenges facing the public is that, unlike other core infrastructure, networks are predominantly controlled by giant corporations who act as gatekeepers.

Imagine if you had to pay whatever a private firm asked to walk to a friend's house; to go to the grocery store; to vote; suddenly, for many people, the basic necessities of life would be out of reach. If someone stepped in your way demanding payment to cross the street... you'd step around him. Getting from place to place in the physical world is too important to be left to the vagaries of an oligopolistic market, and gatekeepers are inimical to a functioning democratic society - why should the digital world be any different?

How networks are structured and accessed has drastic implications for who benefits from them. Universal, unlimited access plays second fiddle to the profit-maximizing goals of vertically integrated private media corporations like Rogers or Bell. Alternative models of network organization and access must be explored if we want to achieve the policy objectives of the Telecommunications and Broadcasting acts, and ensure equitable access, innovation, and quality of service.

Alan Pearce, Martyn Roetter, and Barry Goodstadt put it as follows, from an article published in Bloomberg BNA:

"The historically regulated telecommunications-information-entertainment sector has failed to check the march of the largest network operators (LNOs) towards removing all substantial constraints on their ability to do whatever they please in their own interests. In fact, the largest operators appear to act as non-regulated entities, without regard to impacts on the choices and rights of consumers. Furthermore, these large operators have disregarded the freedom and fairness of access of their competitors to large bases of customers by controlling access to broadband bottleneck facilities." [7]

Strong leadership for a world-class communications system

Not only do they control the quality of service and the means by which we communicate, but the large network operators exert an inordinate amount of pressure on the policy making and regulatory processes as well. In order to protect their privileged dominant position, they deluge the CRTC with reams of 'evidence' - voluminous reports written by experts for hire who charge rates of up to $600/hr - 'evidence' which is unsurprisingly univocal in support of whatever position the large network operators happen to take up [8].

These experts are paid to protect their employers' private interests, not the public interest. And they do their job well.

We are calling on our leaders to stand up to the erstwhile monopolies. We need you to recognize that the public interest outweighs any particular company's private goals. Mr. Blais, when Google and Netflix failed to produce evidence of corporate responsibility, you spoke truth to power. Will you do the same when facing homegrown giants? Mr. Moore, when the wireless carriers lashed out against greater competition, you held fast. Will you reaffirm your resolve? Mr. Harper, will you now stand and take up the cause of the Canadian public?

In 2006, your government ordered the CRTC to "rely on market forces to the maximum extent feasible" - a well-intentioned goal which has failed to produce the desired results [9]. Virtually every Canadian consumer knows the reason for this failure: an oligopoly comprising several giant telecom firms blocks the growth of a truly competitive market at every turn. Will you stand up against an oligopoly that's holding us all back?

That same 2006 order also stated:

"...review should take into account the principles of technological and competitive neutrality, the potential for incumbents to exercise market power in the wholesale and retail markets for the service in the absence of mandated access to wholesale services, and the impediments faced by new and existing carriers seeking to develop competing network facilities"

It is essential that you signal your support for this message. Mandated open and equal access to the incumbents' networks is the only thing standing between Canadians and a retrograde duopoly. This directive needs to be reinforced to make up for 8 years of lost opportunities.

Mr. Moore, Mr. Harper, Mr. Blais, we have given the large carriers our trust. And they have abused it [10]. It's now up to you - we need you to work together to ensure that our networks are open to content producers, to innovative service providers, and most of all, to ordinary Canadian citizens.

We need more than tweets, more than press releases and pamphlets. We are asking for a firm commitment to ensure that the large network operators will no longer be artificially favoured over upstart innovators and competitors, a commitment to providing Canadians with a bright and lasting digital future.

South of the border, American President Barack Obama has challenged the regulator to take the side of citizens. Obama has taken a strong stance: "We cannot allow Internet Service Providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas." He recognizes that "ensuring a free and open Internet is the only way we can preserve the Internet's power to connect our world." [11]

Mr. Harper, in April you said that here in Canada "We are now ready to take our place as the most technologically advanced nation on the planet." [12] We are indeed ready - but we're not there yet. Will you be the one who leads us to the top?

Sincerely,

Benjamin Klass, Communications Policy Researcher, Carleton University. Dedicated to promoting the public interest in fair, affordable, and high quality communication services.

Mike Kedar: Ex founder, CEO and Chairman of CallNet Communications. A Veteran fighter in the protection of the public interest, advocating openness and equal access to the Information Highway.

Dwayne Winseck, Professor, School of Journalism and Communication, Carleton University.

~

Notes

[1] Trichur, Rita, "New CRTC chief Blais aims to 'gain the trust' of consumers", Globe & Mail, Monday, Oct. 29, 2012. http://www.theglobeandmail.com/globe-investor/new-crtc-chief-blais-aims-to-gain-the-trust-of-consumers/article4728950/

[2] O'Brien, Greg, "CRTC "breached its duty to fairness" and "erred in law," says commissioner Shoan" cartt.ca, September 23, 2014.

[3] CBC News, "Wireless carriers hike prices across Canada", March 17, 2014. http://www.cbc.ca/news/business/wireless-carriers-hike-prices-across-canada-1.2575886

[4] CNOC - "Part 1 application requesting relief to improve the quality of wholesale high-speed access services provided by cable carriers"  http://www.crtc.gc.ca/part1/eng/2013/8660/c182_201313113.htm

[5] McEntegart, Jane, "Rogers Next upgrade program has been discontinued", MobileSyrup, October 17, 2014. http://mobilesyrup.com/2014/10/17/rogers-next-upgrade-program-has-been-discontinued-effective-october-17th/

[6] CRTC, "Three-Year Plan 2014-2017" http://www.crtc.gc.ca/eng/backgrnd/plan2014.htm

[7] http://www.bna.com/telecom-act-rewrite-needed/

[8] See for instance, "EXPERT REPORT OF CHRISTIAN M. DIPPON, PHD On Behalf of TELUS Communications Company", January 29, 2014, to CRTC 2013-685, "Wholesale mobile wireless roaming in Canada, Unjust discrimination/undue preference," page 57: "Dr. Dippon's hourly rate is $600" (81 page report). https://services.crtc.gc.ca/pub/ListeInterventionList/Documents.aspx?ID=212288&Lang=e 

[9] Government of Canada, "Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives", SOR/2006-355, December 14, 2006. http://laws.justice.gc.ca/eng/regulations/SOR-2006-355/page-1.html

[10] Geist, Michael, "Wireless Industry's tired "trust us" argument", Toronto Star, October 3, 2014. http://www.thestar.com/business/tech_news/2014/10/03/wireless_industrys_tired_trust_us_argument_geist.html

[11] White House, "Net Neutrality: President Obama's Plan for a Free and Open Internet", November 11, 2014. http://www.whitehouse.gov/net-neutrality

[12] Stephen Harper, "Prime Minister's Message", Digital Canada 150, page 3. http://www.digitaleconomy.gc.ca/eic/site/028.nsf/vwapj/DC150-EN.pdf/$FILE/DC150-EN.pdf

ALSO ON HUFFPOST

Titles You Can Only Get On Canadian Netflix