Proponents of a tax on Internet connectivity to support Canadian programming production will never quit.

June 13, 2017

Making Sense of Jean-Pierre Blais

My learned colleague Michael Geist has published an appreciation of the departing chairman of the CRTC, Jean Pierre Blais. I am glad he has done so because he reminded me of several aspects of Blais’ term that were highly positive innovations. The most important of them was to make the Internet the foremost consideration of policy, and on this I would like to dwell.

There is no statute called the Internet Act. The concept and the technology are unknown to the law. Legislation deals with telecommunications carriers and broadcasters. One concept is based in common carriage, which is hundreds of years old. The other is an artefact of early 20^th century ideas of signal propagation by radio. Yet within the last thirty years the combination of computers and a set of communications protocols which constitutes the basis of the Internet has upended monopolies, shattered protected markets, and dramatically increased human possibilities, as we all know.

The denizens of the Canadian protected broadcasting markets have said, in essence, that there is no internet, that it has no importance for policy.  “What Internet?”, they ask. The Internet does not exist in law, they point out. If it is video it is ‘programming’, and if ‘programming’ it is ‘broadcasting’ and if broadcasting it is to be regulated in all the mind-boggling detail that eighty years of licensing has engendered. They have insisted that the largest communications revolution of the last century – and I include television and radio in that estimate – be squeezed into a previous conception of law, the better to be controlled for the purposes of rent-seeking.

The carriers have done the opposite. In a more subtle way, they have tried to deny the difference between themselves and the Internet by assimilating themselves to it. They have said “we carriers are part of the Internet” and have sought to associate themselves with its emanations of novelty, risk, entrepreneurship, and innovation. As a result, they have asked the regulator to allow them to act as gatekeepers to Internet content. The notion ignores market power. There are roughly 53,000 Autonomous Systems known to the Internet, 53,000 networks of routers under common management. These autonomous systems constitute the Internet. The carriers are still large physical engineering concerns that exercise market power in your neighbourhood, because they have massive amounts of physical plant, built up over decades out of previous telephone and cable television monopolies, and you must go through them to reach the Internet. Carriers may have autonomous system numbers, but there are two, maybe three of them in any given location, through which they exercise market power.

There may yet be market power issues with content delivery networks (Google, Netflix, Amazon and so forth). Content delivery networks are not addressed by telecom or broadcasting legislation. The issue, if one exists, is for a different agency and another time.

If the carriers are not the Internet, and the Internet is not broadcasting, how was it that Blais succeeded in putting the Internet at the centre of his concerns? I would attribute three factors. First, timing: the Internet had become the elephant in the room, so large and so pervasive that it could no longer be ignored. A less determined person than Blais might have tried to do so. Second, he inherited a set of decisions that had already stopped the misapplication of the Broadcasting Act to the Internet and laid the groundwork of network neutrality, under the chairmanship of his predecessor, Konrad von Finckenstein. Third, Jean-Pierre Blais himself.

Blais has acted consistently across broadcasting and telecom decisions to address two problems. In broadcasting, it was to prepare the regulated world for the inevitable transition to one where the economic function called “broadcaster” is superfluous and obsolete. There are and will be program producers, and content delivery networks. There will not be broadcasters. Above all it meant not digging into a losing position. In this he was consistent, and his position clear-headed. In bureaucratic terms this might even be called bold. He was the Renaissance cardinal who would have looked through Galileo’s telescope and drawn the right conclusions.

On the telecom side Blais’ essential contribution was to turn down the carriers’ notion that they were the Internet, and that, just as everyone was making money out of content, they should be allowed to do so too, by squeezing the pipes, by directing people and their traffic to businesses with whom they had existing relationships, in short, by violating network neutrality.

Where the CRTC failed, or disappointed, it was for want of courage to go all the way. I cite the example of not allowing resale of cellular networks. We are still officially beholden to the notion that competition in telecommunications should be facilities-based. Why? It is rather as if car rental agencies should not exist because they do not make cars. Not every shibboleth was overturned in the reign of Blais.

Nevertheless, Mr. Blais got one enormous thing very right: he regulated with a view to the existence, functioning, and attributes of the Internet and needs of people seeking to reach it. The attention he caused to be paid to emergency response – next generation 9-1-1 – is welcome and commendable.  He showed leadership in the essentials.

As to his management of his colleagues, he left some smouldering ruins where collegial relations once prevailed. Mr. Blais showed an inability to conceive of the equality of commissioners or to tolerate the expression of differing views, or perhaps even views that were consistent with his but spoken by someone else. Full commission meetings used to last a day and half; they shortened to a couple of hours. Commissioners thought better of speaking their minds, if everything was already decided, and the penalties of speaking aloud were severe. In such an environment, only sycophants are rewarded.

Accordingly, I am unable to overcome my ambivalence towards the man, though not towards his decisions. He got the policy issues very largely right, and to his enormous credit. Mr. Geist has more fully described the merits of his procedural innovations. His successor will need to repair a damaged Commission, while maintaining the conviction that the Internet is what matters, and that other concerns – no matter how previously important - will have to adapt to it.

So pin a medal on the general’s chest and let his division get some rest and refit, and new leadership.

The previous government kept repeating the same mistake, and it was in good company. 1. Distribute wireless licences. 2. Fail to enforce interconnection (roaming) rights sufficiently. 3. Watch the new entrants go broke and be bought out by incumbents. 4. Repeat. I think there have been two complete cycles of this, under Liberal and Conservative governments. Now, finally, someone woke up and changed policy. A lusty cheer from this ragged survivor of losing many arguments about the need for "facilities-based" competition.

The CRTC has seized the issue of next generation 9-1-1 services, made it its own where it could, and has firmly laid out guidance for other actors where it has no jurisdiction. What I asked for in my report of 2013 has very largely come to pass. More remains to be done, however.

Every idea is born into a world not of its own making. The multi-stakeholder idea of working out problems is not alone, then. It vies for relevance amidst a world of existing statutes, jurisdictions, procedures and precedents.

Conrad Black saw the Internet coming and got out while the getting was good. Speaking of his encounters with Richard Breeden, his nemesis, he wrote:

"there were complaints by some institutional investors about compensation at Hollinger, one of the world’s largest newspaper companies until my associates and I got a good look at the Internet and started to dismantle the company at great advantage to the shareholders,..."

Ajit Pai, Chairman of the FCC, is sowing as much confusion as he can in regard to his plan to eliminate Title II regulation of Internet carriers. His appeal to the conservative base is that the freedom of the Internet is threatened when the carriers through which we pass to reach the Internet are effectively regulated.

May 15, 2017

Good afternoon and welcome the Annual General Meeting of the Internet Society, Canada Chapter. I am pleased you could take the time to be here.

https://ripe74.ripe.net/archive/video/Geoff_Huston-An_Introduction_to_Internet_of_Stupid_Things-20170509-112929.mp4

There is no incentive to reduce the production of ever cheaper chips. 10 billion of them every year.

They will interpenetrate everything and be linked through ever better radio.

Security will never be achieved. In fact it is getting worse every day.

 Download the presentation here:

https://ripe74.ripe.net/presentations/38-2017-05-08-iot.pdf

Imagine a powerful life-extending drug, that also enables trained adepts to transport themselves and any arbitrarily large object, to any point in space. Move ten million tons of passengers and cargo to Epsilon Eridani? Tomorrow? No problem. No messing about with the speed of light. Just "fold space". And the drug is available only on one planet in the known world, Arrakis. You have guessed I am referring to Frank Herbert's Dune.

There is a moment in the movie Ratatouille, where the food critic, Anton Ego, voiced in Jeremy Irons' upper-class British accent, pens a hymn of praise to the primacy of artistic creators. That scene was the whole point of the movie. The overhead and from-behind perspective of the scene captures the snobbish food critic, writing in a coffin-shaped room, by candlelight, admitting the supremacy of the creator over the critic. The food that had stimulated this appreciation was a humble vegetable stew, the ratatouille. Every artist who has ever suffered a bad review must have rejoiced in the scene.

The ARIN conference that I am attending has certain lunch tables reserved for specific topics, such as "whither IPv6" or "IANA/ICANN transition". Frankly they leave me speechless, and I thought today we could set up the history table. There we could discuss a variety of larger issues.

The Concise Oxford Dictionary:

Authoritarian

1. favouring, encouraging or enforcing strict obedience to authority as opposed to individual freedom;

2. tyrannical or domineering.

-n. a person favouring absolute obedience to a constituted authority

Authoritative

1. Being recognized as true or dependable

2. (of a person, behaviour etc.) commanding or self-confident

3. official, supported by authority

From today's Financial Post, the following:

"Blais, who is known for an authoritative leadership style, steered the CRTC on a consumer-friendly agenda that often rankled big businesses. Some believe he has a shot at an extended term even though he was appointed by the Conservatives, given his positive relationship with the heritage department."

News this morning from the American heartland - John Deere tractors have been sold under such stringent conditions that farmers are no longer allowed to make necessary repairs without the manufacturer's permission, and only by going through authorized dealers. Which means that the entire operations of a farm can be brought to halt while the ransom is paid to the manufacturer, who holds a monopoly power. Farmers are seeking Ukrainian software to evade the locks, and legislators are proposing right-to-repair legislation in Nebraska and four other states.

This is going to be an ongoing series, I can tell. Today's headline is "Women settle lawsuit with Canadian maker of Internet-connected vibrator for US$3.75M" and you are going to ask what this has to do with the Internet of things? Everything. This is the Internet of things at work, or play, if you feel that way inclined.

Michael Hirsh, who is CEO of Wow! Unlimited TV, let the cat out of the bag in a recent article in Cartt. 

He praised the Internet, saying:

"there have never been better opportunities for Canadian made TV programming. For example, digital platforms are allowing producers to make content that viewers want to see, ungoverned by traditional Canadian content constructs, creating a more direct relationship with the viewer, with no broadcaster in between."

The CBC carries an article today on outrageous charges for data usage imposed by carriers, despite a new code of procedure imposed by the CRTC. There is a way to fix this problem. It is well-known and has produced reasonable outcomes in wired forms of data delivery.

I thought that title would get your attention. How often does your computer crash? Right. Does it matter? yes, quite a bit, if you lose data or files or a year's worth of work. But no one dies. Now just think about your house going cold in winter, your brakes failing, the power grid going off, your water supply being contaminated, or airplanes crashing.

I met Ajit Pai in the course of conducting my NG 9-1-1 inquiry. I found him friendly, polite, charming even, and highly intelligent. A former telecom lawyer for one of the large US carriers, Pai has been elevated to the Chairmanship of the FCC as a result of Donald Trump's election.

Ideas are both necessary to navigate the world with, and sources of misinformation. When you bump into a wall in the dark, you change your idea of the layout of the house. Unfortunately, if you are a slave to your ideology, there are no walls, you never hit anything, and you never have occasion to learn, because you are never wrong. Such is the ideological life of the Montreal Economic Institute and certain members of the economics profession, when it comes to telecommunications.