George Serentschy wrote an interesting piece in Terence Corcoran's Financial Post today, which I think is comprehensively mistaken. Mr. Serentschy, a former telecom regulator in Austria, became dismayed with the state of investment in European mobile networks, and has been testifying effectively against the idea of MVNOs (mobile virtual network operators) ever since.

Multibillionaire Barry Diller used to be chairman of Paramount in the 1980s and has now moved on to the Internet, being the head of Expedia and a number of other ventures. He spoke about the leadership of Netflix recently in the most favourable terms in a recent interview in the New York Times. His thoughts are relevant to those worried about Canadian content.

One of the strengths of the modern military is that they have determined to be and remain "learning organizations": tactics are obsessively analyzed, and information shared among officers, so that battles are won, casualties reduced, and what needs to be changed, is changed. The opposite seems to be true in telecom policy.

You have to hand it to McCarthy’s. Their communications legal luminaries have pursued the goal of subjecting the Internet to the Broadcasting Act since they first became aware of this loathsome innovation, sometime in the mid-2000s, when email attachments  challenged the dominion of the fax machine in the legal profession. (I surmise).

The proposed review of our communications acts is about to proceed, but the problem is finding a significant issue that legislative change would solve. Of course, some improvements are possible. Yet I would gladly forego a few improvements, if the alternative would be to subordinate the Telecom Act to the purposes of the Broadcasting Act.

We are living in an era that combines extreme psychological fragility where people seek the suppression of all opinion that fails to conform to the fragile consensus. Official thought is not just enforced through the state, but through the independent actions of content distribution networks. The censorship is now automated and largely invisible. The censors are proud of their work.

The arguments of the FCC Chairman Ajit Pai seem to amount to the following. Net neutrality regulation will inhibit investment and lead to over-regulation. I am instinctually in favour of some measure of non-discriminatory access to networks, on the basis of Canada's Internet traffic management procedures decision. It is vital to understand those who disagree.

In the field of telecommunications, there are very few ideas. Such ideas about how the industry works are defended because they produce economic advantage for those who currently have legal privileges and the profits generated by them. These ideas are seldom challenged. They are relied upon to defend economic interests.  They lumber along for decades, and are trotted out whenever economic interests are at stake. Who knows? People may even believe them.

Is that too cynical? Not at all.

Nicholas Carr is a a blogger of insight. He has the advantage of paying a lot of attention professionally to Silicon Valley,. He believes that the owning class in the Valley schemes to absorb every moment of your consciousness into their devices. Every moment. His collection of essays is in book form under the title Utopia is Creepy, and I recommend it warmly. The essays are bite-sized aperçus from his blog, Roughtype.

There are days when I am seized with the temptation to cite Ayn Rand with something approaching approval. Discussions of Canadian cultural policy  tend to bring it out. In an excellent article in the Post this weekend by Calum Marsh, the usual outrage is summoned by the Iron Rice Bowlers because Netflix promises to spend $500 million in Canada on television (read video) productions without any state supervision!

Emily Jackson of the Post reports today that

... lower unit price has generally led to an increase in data cap sizes across the OECD’s 35 member countries, which in turn resulted in an explosion of data usage, the report found.

But as of last year Canada remained a laggard when it comes to mobile data usage per mobile subscription. Canadians used an average 1.5 gigabytes of data per month in 2016, landing in 22^nd place for usage, according to the report. In Finland, which led the way, the average subscription used 11 GB per month.

I doubt those in charge the CRTC are more than slightly perturbed. And I doubt that anyone else in Ottawa is ready for the measures that would fix the problem. Because that would involve giving up a shibboleth. After all, with Canada's immense size, is it not just a natural result that usage prices must be high?

I recall the delegation of the Quebec media production types  appearing before us - a panel of CRTC commissioners -  when we were considering the extension of the Broadcasting Act to the Internet. The issue was whether every Canadian website should be licenced by the state, and taxed, to supply funds for Canadian video programming. When asked whether they understood of the scale of government intrusion into communications, one of the panelists slammed her fist on the table and said "regulate it first, then we'll figure out what it means!".

There is a mole in the Minister's office. Maybe she is in the Heritage Department. She (I assume it is a she) is a secret member of the Internet Society of Canada, but we do not know who she is. We give orders in code and one-time paper. She is loyal and obedient, a true nethead, devoted to the cause of net freedom. Do you have a better explanation for the Minister's latest edition of Canada's broadcasting policy?

Bell Canada joins Google as the latest to hop on the censorship bandwagon, although not for reasons of political correctness. With Bell it is about money, which is a small mercy. Apparently people want to leave the regulated system (Gasp! Shock!) and get free stuff.

It is a sobering sight to see a company destroy its moral authority in an instant. Google's firing of James Damore for his polite and well reasoned argument about the company's mindset will have greater negative effect in the long run than any other action the company has taken. You are not being asked to agree with Damore. You do not have to. You are being asked to imagine the significance of turning over the custodianship of all human on-line knowledge to an intolerant cult. Exclusionary intolerance in academia is one thing; seeing it spread into American corporate culture is quite another. Seeing it in action at a company which owns the indexing system of the central library of the Internet is deeply alarming.

A couple of shallow and obvious data points: people continue to exit the regulated broadcasting universe, yet at the same time there has never been so much money poured into scripted television. Or should I say "television", in the same ironic way we still "dial" a telephone?

ISOC Canada called for early parliamentary hearings on the delay of bringing into force of the private right of action, found in the Canadian Anti-Spam Law (CASL). This allowed people, rather than governments, to sue for damages occasioned by the acts of others in electronic commerce, and not just spam. The Minister of Industry elected to delay its implementation. The Society does not think this is a good idea.

The following is a letter prepared by several people within the Internet Society of Canada and sent today to the ministers responsible for industry/telecommunications and heritage/broadcasting. Collectively, the authors have at least 150 years of experience in the telecom/broadcasting/policy/regulatory arena. Special thanks to Philip Palmer, Len St.Aubin, Helen McDonald, Konrad von Finckenstein, Benjamin Klass, Cynthia Khoo, and  Evan Leibovitch.

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.