The CRTC got it basically right yesterday. While it did not climb down from its position that video on the Internet is subject to its jurisdiction, it made the correct decision that the broadcasting regime was to be more assimilated to the Internet than the other way around. See its treatment of licensed on-demand services at paragraphs 92 and following of Broadcasting Regulatory Policy 2015-86, where what is licensed would be assimilated to the regime of the Digital Media Exemption Order.

"The law surrounds the market and lets it work". I wrote that 20 years ago for a study sponsored by the Competition Bureau on the effect of the Internet on markets. The study argued that the Internet would create, reconfigure and destroy markets with blinding speed. If only I had seen how much and how fast.

In my previous posts I have criticized the legal habit of placing a label on something and thinking that the phenomenon has been understood. Thus, if labelled common carrier, then the rule is non-discrimination. If "broadcasting", then discrimination is both lawful and desirable. More, if the "service" is "broadcasting", then, according to some interpretations, it is broadcasting all the way down through its underlying transport mechanisms. This is the basis of the appeal by Bell in the Klass decision of the CRTC.

Kenji Kushida is a scholar at Stanford University, who has written a most explanatory overview of how America came to dominate cyberspace, through computer companies.  He traces the evolution of the Internet to a series of actions taken by the US government to limit the power of the telephone companies. 

The announcement that the FCC would regulate carriers of Internet applications as common carriers has excited a storm of opposition from everyone but the people. The Financial Post today published my response to some concerns about the dictatorship of the Internet.

I have nothing but praise for the majority decision in Ben Klass' fight with Bell and Videotron (Broadcasting and Telecom Decision CRTC 2015-26). They have achieved a conceptual revolution: they have adopted essentially an Internet view of the businesses they regulate. Since they did not announce their revolution as such, let me point it out. And allow me to heap a little praise on their heads.

When I read conservative blogging treatment of net neutrality before the FCC, I despair of US politics. Here is Glen Beck, for example. Here is Ajit Pai, Republican appointed FCC Commissioner.

Why is a choice between control of what you send or receive that is exercized by large carriers without a referee, on the one hand,  and control by large carriers refereed by government, on the other, treated as the Apocalypse?

Net neutrality is a term we use today to express an old legal concept: common carriage. A "common carrier' is bound to carry goods without unjust or undue discrimination. Thus a ferry-operator, railroad, or telephone company is bound not to discriminate against your shipments in favour of his shipments. It also implies an arbitrator to determine what degrees of discrimination are acceptable and which are not.

You cannot kill this idea except by whacking it on the head. It is the notion, oft repeated, that what is needed in Canada is some kind of merger between the Broadcasting Act and the Telecom Act. I have heard it from Konrad von Finckenstein, former Chairman of the CRTC, Peter Grant, the leading broadcast lawyer in the country, and now my friend and colleague Michael Geist, Canada's leading academic on communications issues.

When such eminent people hold to an idea that I think is palpably wrong, you have to question your reasoning. So here it is.

Every profession has its own way of understanding the world, and the way economists understand it is the subject of a book by David Warsh,  Knowledge and the Wealth of Nations: A Story of Economic Discovery. It is a well-written book, and confirms my view that economists have a hard time understanding the world they live in.

I wish I could get more excited by spectrum set-asides for new entrants. No, I am not talking about bad pornography- it is not that kind of excitement. I refer to the government's announcement that new entrants will be favoured in the spectrum auctions, the goal being to encourage the creation of a fourth wireless carrier in most urban and suburban regions of Canada. I think there are far simpler ways of cracking this nut.

Some carriers point to the risks of placing fiber to the home if there is any risk of having to lease their facilities to smaller ISPs. Many shibboleths are cited. My favourite is the prospect that radio-based services might become suddenly competitive with fiber.

When I consider the skill it takes to converse with the Commissioners in a hearing, and not argue,  I can only admire Ken Engelhart of Rogers. Engelhart manages to maintain a conversation between regulator and regulated that is remarkably free of cant, rancor, contention, and evasion.

Jean Pierre Blais, Chairman of the CRTC, asked the essential question of the hearing to the representatives of the Open Media Coalition on Monday December 1st. Why is service-based competition the way to go? he asked. I have been waiting for this question because it draws attention to the issue: where does innovation come from?

Calgary is building optical fiber capacity, even a network, and leasing out that capacity to all and sundry, according to its testimony. (A brilliant job by its counsel Mary-Anne Bendfeld). This is what Stockholm has been doing for decades. Stockholm has several cable companies and several telecom companies, all of whom ride on the municipal public utility. See Stockab. For the English translation, see this.

Be not mystified, Commissioners! This is a standard operating procedure in some parts of Europe.

In addition to fibre optics, Stokab provides space in nodes/hubs where customers can install communication equipment needed to connect their own networks to others’ networks.

A good background on what is at stake in the essential services hearings is given by David Ellis here.

Shaw admitted this morning that it would continue to invest in facilities regardless of obligations to smaller ISPs to allow access to their facilities. While other incumbents  have occasionally nuanced their positions on this, their essential position has been that by allowing third party access to underlying facilities they will cease to invest adequately in new facilities.

You know when you are a telecom junkie when the essential services proceedings fascinate you.

Watching the show at the CRTC Essential Services proceeding, I count the number of bad ideas that confuse the discussion. Commissioners have them put in their heads by years of listening to them, and have to ask questions predicated on them. This I understand. The purpose of a hearing is in large part to air out the bad ideas as well as the good. As fast as they are aired and hung out to dry, new bad ideas will be tried out. My purpose here is to try to identify the bad ideas.

Carleton PhD candidate  Benjamin Klass, and Mike Kedar, the guy whose actions caused long distance voice competition to come to Canada, have written a letter to government, including the CRTC, on the question of constraining the market power of the incumbents. It is their letter. I post it below. Professor Dwayne Winseck of Carleton signed his name to it in support.