Timothy M. Denton

Success Through Understanding Technology

Submission to the Broadcasting and Telecommunications Legislative Review

 

 

 

 

Internet Society Canada Chapter

 

Submission to the Broadcasting and Telecommunications Legislative Review Panel

 

January 11, 2019

 

  1. 1.Introductory Comments

 

                             Who we are

  1. The Internet Society Canada Chapter (ISCC) is a not-for-profit corporation that engages on internet legal and policy issues to advocate for an open, accessible and affordable internet for Canadians. An open internet means one in which ideas and expression can be communicated and received except where limits have been imposed by law. An accessible internet is one whereall persons and all interests can freely access websites that span all legal forms of expression. An affordable internet is one by which all Canadians can access internet services at a reasonable price.

What is the internet?

  1. Discussions of the internet almost invariably conflate the internet with the applications that run on it. The internet is a series of computer protocols that form a neutral vehicle of digital communications that runs over the infrastructure of incumbent telecommunications carriers – in that sense akin to telephony or telegraphy.
  2. In the traditional world of telephony, the intelligence was principally located in the centre of the network – the switching systems that routed calls from a residential number in Montreal to, say, a business number in Vancouver. The internet disperses the intelligence throughout the network and to both ends of the communication. A circuit is not created, and parts of a single message may travel by different routes to its destination, where it is reassembled into its original form.
  3. The absence of switching means that the distribution of information is limited only by the capacity of the communications paths (fibre, copper, cable, wireless) – and not constrained by the capacity of switches. Increasingly, telecommunications networks have been adapted to internet protocols – even for functions such as live voice communication.
  4. Applications are the content that is delivered over the internet: the search engines, social media, travel reservation and booking services, knowledge banks and streaming services – to name a few. These applications are seen as disruptive of existing industries and ways of doing things. Their reach is global. Their pricing is competitive. They are popular and addictive. They are what is of greatest controversy when “the internet” is seen as a benefit or a threat.
  5. We will not always make fine distinctions in this submission – we will generally use the popular usages, while always keeping in mind that carriage issues are central to the internet as a communications system.
  6. In the broadcasting context, the greatest competitors to the incumbent broadcasting system are found in the applications that run over the internet rather than the internet itself.

About this Submission

  1. ISCC welcomes this legislative review as a singular opportunity to recast the issues surrounding telecommunications and broadcasting in light of the revolutionary impact of the internet on an evolving Canadian society.
  2. The internet has become a primary engine of economic growth, spawning new industries and upsetting the business models of established ones. It has become critical to the ability of businesses to deal with their customers and suppliers. Increasingly, the internet is the means by which government services are delivered to citizens. It has become the method by which friends and families stay in touch. It is becoming critical to communicating knowledge in all domains of knowledge and endeavour. It also competes with and displaces existing media in the delivery of news and entertainment.
  3. Against this background, the legislative framework surrounding the vehicles for carriage of and access to internet services is of primary importance to ISCC. Internet traffic passes through the wireline and wireless networks of telecommunications carriers to reach Canadians. The legislative and regulatory framework surrounding telecommunications carriage is therefore of critical import to ISCC and users of internet services. There are few issues respecting telecommunications and radiocommunication regulation that do not or may not have an impact on the internet in Canada.
  4. As the internet is increasingly the delivery vehicle of choice for all kinds of informational, news and entertainment content, the revision of the Broadcasting Act may detrimentally impact internet content services if those services are subjected to the Broadcasting Act or somehow taxed to contribute to broadcasting subsidies.
  5. In this submission, ISCC will limit its responses to issues that may affect the openness, accessibility and affordability of internet services to Canadians and the availability to Canadians of services on the internet. As a consequence, ISCC will not address some questions that, however important, have no particular relevance to the internet.

Guiding Principles 

  1. The Panel should always be guided in its deliberations by two fundamental considerations. First, a new legislative framework should be constructed from an internet-centric viewpoint. Second — necessary to achieve the first — is to recognize the very different reasons for the regulation of telecommunications and broadcasting.
  2. Put simply, telecommunications regulation is essentially aimed at the potential economic power of telecommunications carriers over business and residential consumers. It recognizes that the ownership of capital-intensive networks cannot be easily duplicated so as to permit a level of facilities-based competition sufficient to protect the interests of users. Telecommunications regulation is meant to prevent the abuse of market power. It does not target either the content of messages sent by telecommunications or the services provided by third parties over telecommunications networks. Indeed, the telecommunications regulator has no power to proactively regulate the content of messages or providers of third-party services delivered by telecommunications — except with respect to abusive activities such as unsolicited telemarketing, spam and other harmful telecommunications.
  3. Broadcasting regulation, by contrast, is focused primarily on the content of broadcast services. Historically, the use of licensing to regulate broadcasters has been justified by spectrum scarcity. There were limits to the number of licences that could be issued in any given geographic area. In addition, broadcast communications were one-way and controlled by the licensee. These characteristics combined to create a strong public interest in ensuring that licensees did not abuse their position as broadcasters to attempt to control public opinion or inappropriately influence political processes. Since the 1960s, regulation has also been used to encourage Canadian content in broadcast programing, and a distinct Canadian broadcasting system, with the objectives of promoting Canadian culture and identity, and supporting the livelihood of artists and technicians. All of this was possible because broadcasting, even after the advent of cable-TV and satellite-TV, was a closed-access and geographically-contained domestic “system” dependent upon a fixed number of one-way distribution “channels”.
  4. The internet is neither a traditional telecommunications service nor is it broadcasting. Rather, it is a vast, open-access array of applications and online services that ride over, and are delivered through, telecommunications networks. The internet has enabled a level of innovation, competition and interactive communications that today underpin what is called the ‘digital economy’. The internet has been widely characterized as the most dynamic generator of economic activity, growth and wealth since the industrial revolution. As a nation dependent on trade, Canada and Canadians have benefited greatly from the access to global markets, content, products and services that the internet has enabled.
  5. There is no doubt that the internet has disrupted and transformed both traditional telecommunications and broadcasting. But those who suggest that the internet is a “convergence” of these two legacy industries miss the point. They conflate the internet, with one small technological side-effect of its vast, economic, social and, yes, cultural impact.
  6. Going forward, public policy needs to recognize that an open-access internet that fosters dynamic competition and innovation is central to Canada’s future economic growth and wealth. Telecommunications policy and legislation should be constructed around that fundamental recognition.
  7. Broadcasting policy and legislation must come to terms with the reality that an open-access internet, with its panoply of content services, is inimical to, and subverts, the legacy regulatory system. Any attempt to impose on the internet the regulatory scheme devised for mid-20th Century broadcast technologies will fail — both technologically, and because Canadians will not accept it. To be clear: that does not mean the end of measures to promote and support Canadian content. What it means is that, rather than seeking to “harness” online media as has been done with broadcast media, Canadian content policy needs to focus on measures that unleash and incentivize the great potential demonstrated by Canadian creators, artists and producers to seize the opportunities that the internet presents.
  8. ISCC believes that, as a matter of legality, it is incorrect that the Broadcasting Act gives the CRTC jurisdiction over audio-visual content on the internet, let alone over the undertakings that provide that content. ISCC further believes that sound policy dictates that the CRTC should not be permitted to attempt such regulation, and any new Broadcasting Act should make that explicit.

 

  1. 2.Telecommunications Act

 

                             General Comments

  1. Telecommunications is a key industry in the Canadian economy. With $60B in revenues, the telecommunications industry is large by any comparator. However, the size and importance of the telecommunications industry itself pales by comparison with the impact of telecommunications on communications-reliant industries that exchange information, sell products, and service clients over communications networks. The effects of decisions in the telecommunications industry potentially affect every government, business, and resident in Canada.
  2. The impact of telecommunications on other industries and consumer interests necessitates that the potential for the abuse of market power be mitigated by regulation in the public interest. That regulation must recognize the enormous complexities of the relations between the telecommunications carriage industry and the economy as a whole, as well as the complexities of the relations between players within the telecommunications carriage market itself. The regulator must be able to identify and address artificial technological barriers to competition between telecommunications service providers, as well as artificial barriers that limit the ability of telecommunications customers to shape their telecommunications services to suit their individual needs. A clear example of this was the inability of clients to bring their own devices when they chose to switch carriers, or had need of devices embedding particular technologies that were not permitted access to carrier networks.

Objectives

  1. The objectives of the present Telecommunications Act reflect the preoccupations of the 1980’s, when drafting of the Act commenced. Some have become outmoded over time, and others are really better addressed by other legislation or other governmental programs.
  2. In an effort to assist in focussing the objectives, ISCC would like to suggest the following to replace the current s. 7 of the Telecommunications Act:

Objective

The objective of this Act is to ensure that Canadians have access to a robust telecommunications industry that delivers world class telecommunications services using world class infrastructure to meet the communications needs of all classes of users.

Guiding Principles

In exercising its powers under Part III of this Act, the Canadian Telecommunications Authority must:

  1. place emphasis on the interests of business and individual consumers of telecommunications services;
  2. have regard to the safety and security of telecommunications infrastructure and of the users of telecommunications services;
  3. ensure that internet service providers treat all data on the internet equally, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication;
  4. rely to the extent possible on market forces to provide telecommunications services;
  5. ensure that quality telecommunications services are available at affordable prices in all regions of Canada; and,
  6. foster the development of wholesale and secondary markets for telecommunications services.

Need for an Expert Regulator

  1. Telecommunications is at the heart of economic growth, innovation, and consumer interests. Telecommunications today centres on the internet: the regulatory framework must be constructed from an internet centric viewpoint. Telecommunications is a technical area, complex, and the regulators’ decisions may have tremendous impacts on the lives of Canadians. It requires expertise that is different from that of broadcasting regulation. As radio spectrum management should logically fall to the telecommunications regulator, the complexity of its decision making will only grow. More expertise and more focus will be required of the regulator in relation to telecommunications and spectrum management.
  2. The telecommunications regulatory function should be separated from the broadcasting regulatory function.
  3. The Act should either establish a self-standing telecommunications regulatory agency or an independent telecommunications regulator that is functionally separate from broadcasting regulation within the CRTC. The National Library and National Archives formerly provided an example of such an arrangement. Similarly the Department of Justice and the Office of Public Prosecutions shared common services. Each had separate heads and professional staff, but was supported by common financial and human resource personnel.
  4. Appointment of telecommunications regulators should require a background in engineering, managing networks, economics, competition policy, law, or computer security. Other regulators should be appointed who have experience in the provision of internet-based services to the public. The needed qualifications do not pose a barrier to desired diversity in the mix of appointees.
  5. The telecommunications regulator should have a Chief Technology officer, whose responsibility would be to provide the regulator with up to date perspectives on technical issues that come before the regulator. The Chief Technology officer should assist the regulator to exercise a true challenge function where technological issues are said to prevent the implementation of regulatory objectives.

Passive Infrastructure

  1. The present Telecommunications Act does not give sufficient authority to the telecommunications regulator to enable it to ensure that telecommunications common carriers have access to poles, antennae, conduits and rights of way at reasonable prices and under reasonable terms and conditions. This is particularly vital for new entrants, but remains important for incumbent carriers as well. There are too many instances of provincial and municipal utilities being unwilling to afford access to utility infrastructure on reasonable terms and conditions. The telecommunications regulator should be able to direct that access to infrastructure necessary be afforded to telecommunications carriers, and determine the terms and conditions, including the price at which access must be given. This issue will be particularly important as cell sizes shrink with high-bandwidth technologies such as 5G, and physical emplacements of equipment multiply a hundredfold.

Content of Messages

  1. Section 36 requires that the content of messages should not be controlled nor its meaning or purpose altered by the carrier without the consent of the CRTC. This is language is too broad, and can lead to attempts to misconstrue the statute, as the recent Fair Play application for website blocking has made clear.
  2. Section 36 should be amended to set out the limited circumstances under which the CRTC could consent to a carrier request to alter the meaning or purpose of a communication or control the meaning of a communication. The current open-ended provision invites abuse and, potentially, regulatory overreach.

Confidentiality of Information

  1. The Act should be amended to provide a narrower scope for the designation of confidential information.
  2. The Act should also provide that experts and counsel for a party to a hearing be given access to confidential information so long as it is not disclosed to the party itself (modelled on the Canadian International Trade Tribunal Act).
  3. The Act should permit the regulator to share information with other government departments or agencies where the CRTC might require their expertise (as, for example, to obtain advice from CSE on cyber security, or to jointly consider a telecommunications merger with the Competition Bureau). Such sharing would require that the receiving agency keep that information confidential in the same manner as must the telecommunications regulator.

Independent Information Gathering

  1. The CRTC has historically been dependent on the parties before it for information. In reality, public interest or third-party interveners cannot be expected to have sufficient capacity or resources to challenge the evidence presented by the major carriers. It is reasonable to expect the telecommunications regulator itself to seek out information from both governmental and non-governmental sources that may assist it in evaluating a particular application.
  2. A revised Telecommunications Act should provide explicitly that the telecommunications regulator can seek both governmental and third-party information that may assist the regulator in deciding any matter before it.

Competition

Relations with the Commissioner of Competition

  1. Competition economics and law are extremely complex, and require a mastery of facts and theory that even an expert tribunal can find overwhelming. It is unlikely that the telecommunications regulator will be able duplicate the expertise that is resident in the Competition Bureau, nor should it be forced to do so.
  2. At present, the Commissioner of Competition has the right to intervene before the telecommunications regulator. This is not enough given the centrality of telecommunications carriage to the economy as a whole and the user experience of Canadian businesses and individual consumers.
  3. The telecommunications regulator must be able to share information with the Commissioner of Competition, but further, the regulator should be able to seek the opinion of the Commissioner of Competition on competition-related issues. The request for such opinion and the advice provided by the Commissioner of Competition should be on the public record. The telecommunications regulator would not be bound by the opinion of the Commissioner of Competition, or accept it only partly, but would be required to explain publicly any divergence from the opinion of the Commissioner. The present provisions dealing with mergers of banks as found in the Bank Act or mergers of airlines as found in the Canada Transportation Act provide analogous provisions that serve as a model. Issues of this nature might, for instance, include assessing the adequacy of competition for the purposes of exercising the power of forbearance, or assessing the decline of competition such as to terminate a forbearance order.

Wholesale Competitors and Resellers

  1. The current Act fails to promote competition sufficiently. Canadians are largely at the mercy of the telecommunications common carriers when it comes to the price, quality, and type of services made available. This harms consumers and businesses who might otherwise enjoy more and innovative service offerings made possible by third party resellers. The lack of competition also proves a drag on the economy as a whole, as it tends to delay innovation and investment by the customers of telecommunications carriers, causing the economy as a whole to underperform.
  2. It should be an explicit objective of the Act to encourage competition and innovation by ensuring there are healthy wholesale and resale markets.
  3. The regulator must abandon the notion that facilities-based competition is the only way to create a competitive market for telecommunications services. That may have been a valid concern in in telecommunications services in the pre-internet era. In the internet age, it is time that the regulator promote competition based on software capabilities and innovation. By facilitating wholesale customers, the regulator can obtain results that are equally effective as are those of facilities-based competition. Indeed, experience with facilities-based competition has demonstrated that it results in inefficiencies and capital waste.
  4. The regulator should be directed to ensure that technical barriers to wholesale and resale must be overcome, access facilitated, and any new service offered by telecommunications common carriers should be offered only when access by wholesale customers and resellers has become technically feasible and enabled. The Act should require the regulator to ensure that there is no lag between the introduction of a new service and the ability of third parties to lease that service at wholesale prices for resale purposes.
  5. The fact remains that the infrastructure of wireline communication services to homes and businesses continue to be owned by common carriers possessing market power that have no incentive to offer telecommunications services at wholesale. Twenty years after the introduction of competition in local telecommunications markets, only incumbent cable and telephone companies have the ability to reach most businesses and consumers in Canada. With capital costs of new infrastructure rising, it is unlikely that substantial inroads will be made by third parties who wish to offer full facilities-based competition. It is clear that the real prospect of competition will come from wholesale and resale customers seeking to differentiate themselves from the carriers and from each other by offering cheaper and innovative – often niche – services.
  6. Access to underlying facilities by wholesale customers will also lead to more intensive use of infrastructure, which in turn will encourage more rapid updating of facilities and spur investment by the common carriers and by businesses that are reliant on telecommunications services.
  7. The idea that competition should only be supplied by facilities-based end-to-end carriers who own all their physical facilities (towers, transmission facilities, fibre or copper lines) has been obsolete for some time. Legislation must bury this false and restrictive view of the real scope for competition.

Structural Separation

  1. Vertical integration of telecommunications carriers into broadcasting and online content services creates economic incentives for anti-competitive behaviour, in particular self-dealing, whereby the integrated carrier confers preferential treatment on its vertically integrated broadcasting and content services. The CRTC’s decision in the Mobile-TV case is an example.
  2. In addition, in a largely deregulated telecommunications market, vertical integration makes it difficult, if not impossible, to discern flows of revenue between the common carriage, broadcasting and online content businesses. This means that consumers of telecommunications services may be unknowingly subsidizing the broadcasting and/or online content ventures of common carriers. That outcome would represent another form of anti-competitive behaviour, conferring a potentially significant advantage not available to other providers of broadcasting and content services.
  3. Accordingly, ISCC believes that common carriage should be required to be carried out in a corporate entity that is structurally separate from any vertically integrated, or otherwise affiliated, broadcasting or online content services. This would protect telecommunications customers who may otherwise be subsidizing the carriers’ affiliated businesses.
  4. A further concern is that, in a largely deregulated telecommunications market where incumbent, former-monopoly local access network operators also lease wholesale capacity to local service competitors, the incumbent has the opportunity, and economic incentive, to allocate to its own retail service lower costs for network access than it allocates to wholesale competitors. This form of anti-competitive behaviour was less of a concern when the regulator had access to cost allocations related to retail prices. But this is no longer the case. The internal accounting of vertically integrated carriers is not transparent — especially with respect to sales and promotions. The decisions that comprise the CRTC’s net neutrality policies highlight the lack of transparency in this regard, and the potential for abuse.
  5. The telecommunications regulator should be explicitly empowered to order structural separation between common carriage network services and other aspects of a common carrier’s business – whether broadcasting and online content, or local retail telecommunications services. This could be used by the regulator to ensure that all those who make use of the local network infrastructure to deliver services to end-users compete on a level playing field and competitors are treated no differently from the common carrier’s treatment of its own retail operations. The United Kingdom, Australia and New Zealand are currently implementing this model of regulation.

Net Neutrality

  1. ISCC believes that the CRTC has handled the issue of net neutrality well, and that the current non-discrimination/undue preference provisions have proved effective thus far to ensure net neutrality. However, the concept of net neutrality should be one of legislative policy and not of regulatory policy that can changed at the discretion of the regulator or by direction of the Cabinet. We have above suggested wording in the statement of objectives of the new Telecommunications Act.

Consumer Interests

  1. The current Act does not make a single reference to interests of either the business or individual consumers of telecommunications services. This is a significant oversight, and a misdirection of the regulator. The objectives of the Act should make specific mention of the critical importance of regulating in the interest of the consumers of telecommunications services.. We have suggested wording in statement of objectives of the new Telecommunications Act.
  2. The Act should direct that the CRTC, in making decisions under Part III, place the interests of the consumers of telecommunication services at the heart of its decision- making.
  3. While clearly the regulator must take into account a large number of competing factors and interests in its decision-making, ISCC believes that the telecommunications regulator should, where other factors are equal, be required to decide in the interest of consumers.

Safety, Security and Privacy

  1. The Act should have an objective of ensuring the safety and security of communications and communications infrastructure.
  2. The Act should give the CRTC the power to set standards of security of networks and to oversee their compliance.
  3. Privacy in the internet world is a legitimate concern of all Canadians. While the policy responsibility for privacy is assigned to the Privacy Commissioner, ways must be found to permit the telecommunications regulator and the Privacy Commissioner to cooperate on privacy issues involving the internet as well as to provide that rulings by the Privacy Commissioner may be applied by the telecommunications regulator. Since PIPEDA has been introduced, giving it jurisdiction over the privacy practices of federally regulated carriers, the objectives of the Telecommunications Act do not need to make an explicit reference to privacy.

  1. 3.Radiocommunication Act

 

General Comments

  1. Spectrum licences are the licensing to common carriers of blocks of radio frequencies within distinct geographic areas. The carriers then use those frequencies to enable unlicensed devices – cell phones, smart phones, pagers – to connect to the carrier networks.
  2. Canada issued its first mobile spectrum licences in 1985 to the then incumbent regional telephone companies and a national licence to Rogers Cantel (later purchased by the Rogers communications group of companies). These licensees then launched Canada’s first cellular services – which have grown into today’s comprehensive wireless services market.
  3. In those 33 years, wireless communications have grown to represent 50% of telecommunications carrier revenues. It produces rates of return that would have been the envy of earlier generations of regulated telecommunications providers.
  4. Wireless services have become nearly ubiquitous, and certainly indispensable to its 31 million Canadian subscribers. Moreover, since the arrival of the smart phones and tablets, mobile wireless services are a key means by which millions of Canadians access the internet while on the move – but not just on the move: smart phones have increasingly replaced landlines as residential and office phones. Canadians use their wireless devices to pay bills, watch online content, listen to music, use social media platforms, do homework, access databases, and connect with their employers, customers and friends.
  5. Despite the extraordinary growth and diversification, all is not bliss in the wireless world. Repeated attempts to expand the number of facilities-based competitors have repeatedly failed. Set asides for new entrants have failed to result in new independent wireless carriers emerging.Instead of enhanced facilities competition, we observe that only the incumbent wireline telecommunications companies and incumbent cable companies have the revenues and infrastructure to support expansion into the wireless market. Meanwhile, two national carriers, Bell and Telus, rather than developing their own national wireless networks, share their networks such that each acts as a MVNO in the other’s territory, so real facilities-based competition is unlikely to exceed three carriers in any market.
  6. The new entrants faced formidable hurdles. The first was the need to build out their networks. Doing so was made more difficult by the difficulty of assembling the needed infrastructure: wireless communications depends on towers and antennas, but also on wireline backhaul, and that is dependent on poles, rights of way, and access to conduits. The incumbent carriers and cable systems had those rights already in place. The new entrants faced local resistance to the erection of towers, the reluctance of municipal utilities to share poles and rights of way, and the difficulty of negotiating matters such as tower sharing agreements with incumbents. Nor were the new entrants, possessors of banks of legacy spectrum – originally allocated to the incumbents free of charge.   And the incumbents did not take the threat of new entrants eating their lunch lightly: flanker brands of the major incumbents quickly lowered prices to meet the competitive threat. Each new independent entrant suffered either a quick or a lingering death. This pattern has repeated through at least three cycles of spectrum licensing, both in discretionary spectrum licensing and the award of spectrum through auctions.
  7. 5th Generation wireless networks will only compound the problems that have surfaced in the wireless world. While much about their ultimate configuration remains unknown, we do know that they will be extremely infrastructure-heavy, will require minimal latency (for operations such as autonomous vehicles), and will demand ever more spectrum, which means that the cycle for spectrum planning, reharvesting spectrum from current uses, and the issue of spectrum licences will have to be both accelerated and systematic.
  8. In light of the above, ISCC believes that both legislative change and a reallocation of governmental responsibilities will be necessary to address the legacy issues of wireless competition and to meet the challenges that intensified spectrum usage will pose.

Spectrum Management Legislation

  1. ISCC recommends that spectrum management legislation be introduced to deal with the planning of spectrum use, the allocation of frequency blocks for specific purposes, the award of spectrum licences by auctions, the imposition of terms and conditions on spectrum licences, and the termination of licences and the refarming of outstanding spectrum to other uses. The Australian Radiocommunications Act provides an instructive model of such legislation.
  2. Spectrum management legislation could be either self-standing, or merged into a new Telecommunications Act.
  3. ISCC also considers that the spectrum planning and management functions should be confided to the telecommunications regulator. The current system of spectrum planning and licensing is vested in the Department of Innovation, Science and Economic Development. Its processes have proven too slow. The focus of the Department is too diffuse, covering broad policy areas what are too demanding of Ministerial time. Especially with the impending adoption of 5th Generation wireless technologies, a more efficient means must be found to consult on, plan, and implement spectrum usage. The telecommunications regulator would be the best place to vest these responsibilities.

Competition

  1. We have outlined above some of the problems encountered in the efforts to encourage competition in the wireless industry. ISCC takes the view that only wholesale access to the incumbents’ wireless networks will maximize the use of those facilities, and offer Canadians innovative service choices while sparking price competition. ISCC recommends that wholesale access to incumbent networks should be mandated in the new spectrum management legislation or the new Telecommunications Act.
  2. Matters such as tower sharing, access to poles and rights of way, spectrum hoarding, and anti-competitive behaviour are not addressed in the Radiocommunication Act, and yet are key to realising the full potential for radiocommunication services and competition in those services. Those issues should be specifically addressed in the powers given to the telecommunications regulator in the new Telecommunications Act.

Secondary Markets

  1. ISED and its predecessor departments have for many years adopted market-friendly policies. Those policies have not been backed by a legislative framework permitting the full implementation of those policies. The review of the Telecommunications Act presents the perfect opportunity to plant the roots for a true market oriented approach to spectrum management and spectrum markets.
  2. The current Act discourages the free play of market forces. For example, all changes in licence ownership must be individually approved by the Minister. A forward-looking and market-oriented Act would include such features as:

  • Ensuring that the sale or leasing of radio spectrum bands and their subdivision by any means that makes sense to the parties, including by geography and time, are effective without regulatory approval or intervention;
  • Providing that spectrum assets can be secured and foreclosed in accordance with current financial practices; and,
  • Require the registration of transfers and security interests in spectrum licences in order to be effective against third parties.

           

  1. With these measures in place, secondary markets in spectrum can be created and managed within the confines of ordinary legal and commercial processes. The current discretion that remains in the hands of the Minister – even if largely unexercised – adds time, cost and uncertainty to what are otherwise purely market transactions.

Fallow Spectrum

  1. Legislation dealing with spectrum planning and management must address mechanisms to discourage spectrum hoarding and create incentives for the transfer of underutilized spectrum to more intensive or economically important uses. The legislation should contemplate the recycling of spectrum now used for broadcasting to other uses as technology either reduces the spectrum needed for broadcasting purposes, or other technologies become the primary means for delivering scheduled programing

Radiocommunication Act

  1. The Radiocommunication Act has proved itself effective at covering matter such as radio interference, conditions of device and operator licences, their renewals, and device-specific licence fees. ISCC believes that, apart from the creation of discrete legislation to deal with spectrum planning and management, the present Radiocommunication Act can largely be retained.
  2. ISCC believes that responsibility for implementing the Radiocommunication Act should remain under the responsibility of the Minister for ISED.

       Encrypted Programming Signals or Networks Feeds

  1. Paragraphs 9(1)(c) and (d) of the Radiocommunication Act that create the offence of decrypting encrypted programming signals and rebroadcasting decrypted programming, together with the right of civil action that flows from those provisions (sections 18 and 19). These provisions do not deal with true radiocommunication issues: they are properly matters of copyright infringement and enforcement. The provisions should be moved to the Copyright Act in the course of the current review of that Act.

  1. 4.Governance and Effective Administration

General Comments

  1. In the opinion of ISCC, the most critical issue of governance is the necessity of separating the broadcasting regulator from the telecommunications regulator. All other issues pale in comparison. How this issue is decided will largely determine whether Canada will have policies that foster innovation, strike the right balance between the interests of telecommunications providers and their business and residential customers, and find the correct balance between carriage providers and wholesale telecommunications service providers.
  2. The most consequential institutional reform would be the modification of the current combined regulator to provide two specialized tribunals: one for broadcasting and the other for wireline and radio-based telecommunications common carriage.
  3. The premises that dictated the combination of telecommunications and broadcasting under one regulator in the 1960’s have proven both false and costly. The use of the term “convergence” persists beyond any usefulness. The internet has not resulted in the merger of broadcasting with telecommunications but rather the opposite: broadcasting is now merely one application among many communicated over the internet using the carriage services provided by telecommunications common carriers. Cable television systems have resolved into two-way carriers - on which broadcasting is again but one application. Going forward, it will be essential to recognize that in delivering programming, neither Bell nor Telus have suddenly become Broadcasting Distribution Undertakings: they remain telecommunications carriers and must be regulated as such. Similarly, the formerly unifunctional cable systems have evolved into important telecommunications carriers, and the issues respecting wholesale access to their carriage capacity has become a critical issue in telecommunications policy.
  4. These issues, and many more that confront the telecommunications regulator, are vital to the health of the Canadian economy at large: their significance for the evolution of the innovation economy, the realization of digital policy, and the maximization of consumer interests is vital. The job of regulation requires and demands specialization, the application of complex technical knowledge and economic theories to the resolution of ever more complex technical and economic issues. This is no longer a job for the generalists who have traditionally been appointed to the CRTC. This is a job that requires significant professional knowledge and experience.
  5. Second, the issues that are now and that will in the future to be faced by the telecommunications regulator: the need to seek the expertise of other agencies of government in dealing with issues that come before it. As we said before, the telecommunications regulator needs to be able to seek the input of the Commissioner of Competition on issues of competition. Likewise the telecommunications regulator should be able to seek the expertise of departments such as the Communications Security Establishment, the Department of National Defence and the Department of Public Safety on matters such as network security and security standards. In matters of privacy, the telecommunications regulator must be able to work closely with the Privacy Commissioner.
  6. Third, should the telecommunications regulator be a law enforcement agency? There has been mandate creep associated with the Unsolicited Telecommunications provisions of the Telecommunications Act (section 40 ), the Do Not Call provisions (ss.41.1 – 41.5), and especially the administration and enforcement of the core provisions of what is popularly called Canada’s Anti-spam Legislation (CASL). While these provisions are desirable in themselves, it is not clear that it is truly within the scope of a telecommunications regulator to police the activities of advertisers, business users of the internet, and telemarketing operations. ISCC believes that these activities could better be settled on agencies having genuine law enforcement expertise (e.g. the Competition Bureau), or on a specialized branch within the Department of Industry, Science and Economic Development. ISCC does not believe that the specialized skills demanded of the telecommunications regulator fit well with the law enforcement and quasi-judicial functions required of decision makers under these provisions, which extend far beyond carrier regulation and potentially intrude into all sectors of the economy.
  7. ISCC proposes that confidential information divulged to the telecommunications regulator may be shared with any federal department or agency whose expertise may be required by the CRTC in any matter before it. It is imperative that any receiving agency be bound to the same confidentiality requirements as are imposed on the telecommunications regulator in respect of the shared information.

 

 

  1. 5.Broadcasting Act

General Comments

  1. The closed economic ecosystem of Canadian broadcasting, supported as it was by direct and indirect regulatory and taxation measures, is unsustainable in the internet environment. The following phenomena are eroding the economic protections for broadcasters that have sustained Canadian broadcasting for the last two generations:

  • the increasing acquisition and retention of world rights to audio-visual content by streaming services is reducing the availability and raising the costs of quality foreign content;
  • simultaneous substitution is inapplicable in an online on-demand environment; and,
  • restrictions on the deductibility of advertising by Canadians on streaming websites is technologically incomprehensible and economically ruinous for Canadians competing in world markets.

  1. What then should be the focus of the broadcasting regulator? ISCC proposes that the broadcasting regulator should increasingly be the gateway to governmental policies and programs aimed at incentivizing distinctly Canadian content.
  2. More specifically, it should be the role of the broadcasting regulator to:

  • distribute public funds for the support of Canadian content;
  • administer an expanded regime of tax credits, refundable tax credits and tax remissions for investment in qualified Canadian content;
  • promote Canadian content domestically and abroad; and,
  • aid the discoverability of Canadian content on the internet.

 

Broadcasting Definitions

  1. It is critical that broadcasting be defined so as to exclude purely online on-demand audio-visual content.
  2. In the internet ecosystem there is an urgent need to define what is subject to regulation and what may be done without a licence: that is to say, what can be communicated without the permission of the state. ISCC believes that the current legislative definition of broadcasting, properly construed, excludes online on-demand content. The CRTC, on the other hand has, since the 1990’s, claimed the jurisdiction to regulate online audio-visual content. It has used that assertion of jurisdiction to exempt, on conditions, online content services. This leaves online content services providers in the position that the CRTC could, at any given moment, subject them to regulation as broadcasters. It also leaves any communications by video, such as a YouTube posting, equally subject to state licensing.
  3. It is intolerable that an industry that is increasingly important to Canadians, and increasingly important as a vehicle of Canadian self-expression, should be at the mercy of a regulatory policy shift. The definition of “broadcasting” must be reformulated to specifically exclude all on-demand transmission of audio-visual content over the internet.
  4. This would be consistent with the constitutional underpinnings federal jurisdiction over broadcasting. The jurisdiction of Parliament over broadcasting derives from the 1932 Radio Reference, where the Privy Council recognized federal jurisdiction over radio communication. In its decision, the Court asserted two grounds upon which federal rather than provincial jurisdiction prevailed over radio. First, and of no import in the present context, was the power to make and implement treaties. There are no treaties governing online content services. The second pillar, and the only one of importance today, was its determination that radio transmissions fell under the power to regulate interprovincial undertakings. Because over-the-air broadcasters are transmitted by means of radio waves that inescapably transmit over interprovincial boundaries, broadcasters become subject to federal jurisdiction as being undertakings that link on province with another (like telegraphs and railroads). By contrast, online content providers and their clientele are the customers of the telecommunications carriers that are interprovincial undertakings. As the Supreme Court of Canada’s Fastfreight decision demonstrated, the customers of interprovincial undertakings are not thereby interprovincial undertakings.
  5. The present claim by the CRTC to jurisdiction over internet content services and its ability to exempt the transmitters of such programs from licensing is based on an erroneous view of its powers and the scope of Parliament’s powers with respect to entities that do not use airwaves or who do not possess the infrastructure to transmit across provincial or international boundaries.
  6. ISCC also believes that the transmission of online content at the demand of a user is not a broadcast, but rather is a private communication of that content. As such, that communication enjoys the free speech protections guaranteed under the Canadian Charter of Rights and Freedoms.
  7. The accelerating delivery of content online means that fewer and fewer content originators (at least proportionally) will be subject to CRTC regulation. This could be a very good thing. Freed from such restrictions such as format regulation, Canadian content requirements, and public service obligations, internet content services will be free to seek niche audiences both domestically and abroad, potentially reaching audiences that have never previously existed, or that had never previously had a vehicle for their self-expression.

 

                        Broadcasting Policy Objectives

  1. The objectives of the Broadcasting Act were developed in an era when the Canadian broadcasting system was a closed ecosystem with mutually reinforcing measures that provided relatively assured revenue streams to broadcasting licensees. Due to the ability of the state to guarantee the value of a broadcasting licence, it could demand that licensees of various categories make significant contributions toward the attainment of regulatory objectives: particularly that of Canadian content.
  2. We have shifted to an open system in which licensees face real economic competition from both players outside the Canadian regulatory system (e.g. Netflix, You Tube, Spotify), and from Canadian services that are purely internet based and not subject to regulation.
  3. If, as ISCC recommends, the CRTC becomes less of a regulator and more of a vehicle for the implementation of government programs designed to support uniquely Canadian content, then many of the existing objectives can be imposed on the CRTC to serve as guidelines for the kind of content it should be supporting. The objectives thus become the criteria for determining who gets state support or the benefit of generous tax credits to help assist the production of Canadian content.
  4. It is unrealistic to expect that the Canadian licensed broadcasting sector will ever, on its own, be able to generate the revenues that would permit the creation of the kind of programing envisaged by the objectives that now govern the Broadcasting Act. Instead, the focus will have to be shifted to the criteria for eligibility to public support for Canadian content.

                   Support for Canadian Content and Creative Industries

  1. Content competition has increased sharply and the economics of program delivery have fundamentally changed. The profitability of broadcasting and online content delivery vehicles is shrinking. Netflix, while seemingly dominant, has yet to produce an operating profit. The competition for quality content is intense, and acquisition costs are high. Neither online content services, nor traditional broadcasters, will be able to sustain the kinds of profits that permitted the broadcast regulator to dictate Canadian content requirements and expect them to be fulfilled.
  2. It is unlikely that either the traditional broadcasters or their online content competitors, domestic or foreign, will be able to contribute significantly to funds to support independent production. The focus of both traditional and online actors will be on providing content that will attract audiences that will deliver profits. The surplus profits for contributions to production funds that are currently required by the CRTC are in danger of disappearing. The growing demand for world-wide distribution rights will hinder the continued existence of a separate Canadian rights market. In such circumstances, it cannot be expected that the Canadian broadcasting geese will continue to lay golden eggs. If the Canadian public wishes distinctive Canadian content, and it cannot be provided by competitive forces, then it will have to be paid for by a combination of direct subsidies and tax incentives.
  3. The existing scheme of the Broadcasting Act is not essential to the production of uniquely Canadian content. The dependence of Canadian private sector broadcasters on foreign (mainly US) productions for its profitability is breaking down. Over the last two generations, little of those profits were invested in Canadian scripted content, despite a virtually guaranteed profitability. The gradual drying up of US productions will challenge Canadian private sector broadcasters to develop uniquely Canadian content that will find an audience in Canada as well as an audience abroad. ISCC is optimistic that market forces will increasingly force private broadcasters to look to Canadian content to provide unique and compelling content for their audiences.
  4. ISCC does not believe that it is in the interests of the industry itself, or of the Canadian public, to require that either domestic or foreign online content services should be subject to Broadcasting Act or to the contribution requirements that have evolved under its regulatory scheme. The competition provided by online content providers to the private broadcasting sector is contribution enough. That alone will discipline the behaviour of private broadcasters in a way that the CRTC has never and will never be able to do.

            Democracy, News and Citizenship

  1. ISCC agrees that news and information is critical to the development and maintenance of a healthy democracy. ISCC does not believe that legislative measures are necessary or helpful to the resolution of issues surrounding fake news, platform manipulation, and the use of bots as a multiplier of extreme or misleading views. The basis of a democratic society is an informed electorate. Where once voters had to discern the biases displayed by print journalism and editorials, now the electorate must use its judgment to distinguish fact from fiction, lies from truth, and opinion from fact in an online environment. The remedy for the kinds of manipulations that we have seen displayed on online platforms such as Facebook, Instagram or, possibly, Google is digital literacy rather than digital censorship.
  2. The recent exposure of techniques used to exploit ostensibly neutral platforms such as Facebook and equally neutral search engines such as Google has led to a significant public reaction, to which both Facebook and Google are responding. The ultimate resolutions arrived at by these powerful entities may well be unsatisfactory – but the issue will have been clearly brought to the attention of the public, and market forces may well find solutions that are compatible with an informed citizenship.
  3. ISCC believes that, again, modest investments of public funds in public digital education, perhaps combined with support for news gathering and disseminating organizations, would be superior to legislative mandates This would be a far less dangerous approach to a knot of issues that engage fundamental free expression rights.

 

          Cultural Diversity

  1. The internet has radically democratized access by producers of content to, literally, billions of potential consumers, just as audiences can now enjoy the works of virtually any producer of content. There is no lack of cultural diversity on the internet. Canadians are free to communicate and be communicated to in any language that an individual may have mastered or that a community may have adopted. There are virtually unlimited cultural styles and emphases available to the discerning consumer. Unlike in the traditional broadcasting environment, the internet frees linguistic and cultural groups, down to the level of the individual, to create, disseminate, and consume content.
  2. If the concern is for production values, or the output of the cultural institutions of particular communities, then the solutions are to be found not in legislation, but in access to funding. In principle, that funding should come from the sponsoring community, but it is open to the broadcasting regulator to open up funding or incentives to what are seen to be representative organizations of particular cultural communities.
  3. ISCC cautions, however, that the online environment is subversive of supposedly representative organizations, and will offer both content and economic competition to officially recognized and funded organizations. That is a basic feature and strength of the internet.

Governance and Effective Administration

  1. The most important step that can be taken toward better governance and effective administration of any future Broadcasting Act would be the creation of a distinct broadcasting regulator – separate from the telecommunications regulator. As we have suggested above, we believe that the new Broadcasting Act should confer on the broadcasting regulator an active role as the portal to funding and tax incentives for the creation, promotion and discoverability of Canadian content.
  2. Canadian specialty channels do not operate over-the-air. They are carried by common carriers, BDU’s or satellite services. Their primary competition is with domestic and foreign websites. There is little reason for their continued regulation as they neither use valuable spectrum, nor do they possess market power, as there already are online competitors to their services. The future Broadcasting Act should establish a mechanism to permit the full deregulation of specialty services. That mechanism should be forward looking to ensure that, as over-the-air services move to alternative delivery mechanisms, they too can be relieved of regulatory obligations.
  3. This legislative review also provides an opportunity to explore more effective means of awarding licences, giving a greater role to market forces. For instance, auctions might prove more effective than regulatory hearings to determine who should be issued licences in many markets and formats. Similarly, incentives should be provided for over-the-air broadcasters to release spectrum and move to alternative means of program delivery.
  4. A major issue has continued to be the concentration of ownership of broadcasting undertakings. The resolution of the impacts of ownership concentration on competition is one on which the broadcasting regulator neither has nor can be expected to have special expertise. Provision should be made in the new Broadcasting Act for consultation with the Commissioner of Competition, including the disclosure of information to the Commissioner and the publication of opinions or advice received from the Commissioner.

6. Interim Measures

 

  1. As the Legislative Review Panel is unlikely to finish its final report, nor new legislation be introduced prior to the next federal general election, ISCC would like to suggest a limited number of measures that could be taken under existing legislation that would potentially have significant positive impact in the short term, without prejudicing needed legislative reforms.

                   Wholesale Access to Wireless Services

  1. The CRTC has made a finding that incumbent wireless carriers have market power and that there is a lack of competition in the market for wireless services. Despite that finding, the CRTC failed to approve measures that would increase competition in the market for wireless services. The Legislative Review Panel should, as an interim measure, recommend that the Governor in Council exercise its power of direction under s. 8 of the Telecommunications Act to require that the CRTC approve wholesale access by mobile virtual network operators to the facilities and services of incumbent facilities-based wireless carriers.

                   Report on Mandated Access to Wholesale Services

  1. By subparagraph 1(c)(ii) of OiC 2006-1534, the Governor in Council directed the CRTC to review its regulatory framework for mandated access to wholesale telecommunications services. The purpose of the directed review was to increase incentives for innovation and investment in, and construction of, competing telecommunications and network facilities. The CRTC was further ordered to determine where mandated services were not essential services and the appropriate pricing of mandated services. The CRTC was directed to take into account the principles of technological and competitive neutrality, the potential for incumbent to exercise market power, and the impediments faced by new and existing carriers to develop competing network facilities. Ten years on, the incumbent telecommunications and cable-TV operators retain market dominance across Canada, and continue to exercise market power in many local access markets. Vertical integration and consolidation has reinforced the incumbents’ market dominance to include wireline and wireless access, internet access, broadcasting and broadcasting distribution and content services. The CRTC has found, in relation to net neutrality, that incumbents have engaged in behaviour that violated subsection 27(2) of the Telecommunications Act. The Competition Bureau has concluded that incumbents exercise market power in the wireless industry. The market share of non-incumbent competitors remains so small as to warrant concerns that the sustainability of competitive markets may be in jeopardy.
  2. Because the wholesale access framework has proven deficient to ensure the development of competing telecommunications network facilities, it is timely for the Governor in Council to direct, under section 14 of the Telecommunications Act, that the CRTC re-examine its framework policies for mandated access to wholesale telecommunications services, particularly the extent to which that framework
  3. a.advances policy objectives (c), (f), and (h) of the Telecommunications Act; and,
  4. b.deters economically efficient entry that would otherwise enhance competition and more effectively protect the interests of business and individual consumers of telecommunications services.

                   Standstill Direction

  1. S

                   Vertical Integration

  1. Among the most important and controversial decisions in recent years was the decision of the CRTC to permit the vertical integration of telecommunication common carriers and broadcasting undertakings. There has been no follow up public assessment by either the CRTC or the government to determine whether that policy has met the expectations of the regulator. The Governor in Council should order the CRTC, under section 15 of the Broadcasting Act and section 14 of the Telecommunications Act, to inquire into, and report back on, the state of vertical integration and consolidation of broadcasting undertakings and telecommunications common carriers in Canada.

  1. In particular, the CRTC should report on whether, and to what extent:

            a) vertical integration and consolidation have:

  • contributed to achieving the objectives of the Broadcasting Act;
  • been beneficial or problematic for the production and exhibition of Canadian content;
  • been beneficial or problematic for Canadians as citizens and as consumers of broadcasting and telecommunications services;
  • had an impact on the state of competition and innovation in, and on pricing of, broadcasting and telecommunications services in Canada; and,

b) structural separation of broadcasting and telecommunications entities would have beneficial or harmful impacts for competition, innovation, Canadian content, and Canadian broadcasting audiences and Canadian consumers of telecommunications services. 

  1. The CRTC should be directed to seek the advice of the Commissioner of Competition with respect to this report, and that advice should be published as an annex to the report of the CRTC.

7. Conclusion

  1. In this submission, ISCC has attempted to emphasize legislative measure that are needed to ensure that Canadians benefit to the greatest extent possible from the wealth of opportunities both economic and cultural offered by the internet.
  2. ISCC sees telecommunications law and policy as key to ultimate success of Canada in the global digital economy. To capitalize on the opportunities that lie before us, Canada must develop a legislative framework that aspires to world class infrastructure, encourages competition at all levels of telecommunications services and places the consumer interest at the heart of regulatory decision making.
  3. At the heart of this submission lies the need for clear and distinct policy frameworks for telecommunications and broadcasting. The marriage of telecommunications and broadcasting regulatory agencies has been a failure, and much to the detriment of effective telecommunications regulation. Only a separate telecommunications regulator, with members who have relevant expertise, can face and master the panoply of issues that will come before the telecommunications regulator in the coming years. The cultural and telecommunications departments were split decades ago and the regulators should follow suit.
  4. Attempts to regulate the internet under the Broadcasting Act will engender a storm of public opposition. A recommendation to do so by the Review Panel would destroy its credibility in an instant. We urge the Review Panel to support a revised definition of broadcasting that makes explicit that a new Broadcasting Act does not give the broadcasting regulator jurisdiction over purely online content.
  5. Finally, ISCC would like to stress that the most perfect legislation in the world will not be sufficient to ensure the transition to the digital economy. Canada’s telecommunications infrastructure needs to be built out. Access to high speed broadband services should be a birthright of citizenship. Government support for broadband connectivity has been modest and peripheral. Canada should make digital citizenship a centrepiece of economic and cultural policy. To achieve that, Canada should seek to ensure that every Canadian resident has access to gigabyte broadband service within the next ten years, and back that commitment with commensurate funding.

***END OF SUBMISSION***

Next Page Appendix 1→

Submission to the Legislative Review Panel

 

APPENDIX 1

Responses to Specific Questions

1. Universal Access and Deployment

1.1 Are the right legislative tools in place to further the objective of affordable high-quality access for all Canadians, including those in rural, remote and Indigenous communities?

This question is misconceived. While ISCC keenly agrees with the objective, we believe that only government infrastructure investments, of a scale far more ambitious than any that a Canadian government has thus far offered, can be expected to permit affordable high-quality access for all Canadians. The current legislation has been used to gradually expand broadband to rural and remote communities in less than a generation. A far more ambitious government led initiative is necessary to close the gap between the bandwidth poor and the bandwidth rich, and so unlock the human capital and potential that Canada has to contribute to the digital economy.

1.2 Given the importance of passive infrastructure for network deployment and the expected growth of 5G wireless, are the right provisions in place for governance of these assets?

The issues surrounding access to municipal and utility owned infrastructure, the length of planning approvals and consulting processes are major barriers to timely deployment of 5G networks, just as they are to the laying of fibre optic cables or stringing wires on utility poles. The telecommunications regulator should be given the power to decide that telecommunications carriers be given access to passive infrastructure as well as on the terms and conditions of that access– including price, specify the time limits within which applications for planning approvals must be given, and to override, when necessary, technical and regulatory barriers to access to contested infrastructure.

2. Competition, Innovation, and Affordability

2.1 Are legislative changes warranted to better promote competition, innovation, and affordability?

2.1 The future Telecommunications Act should specifically mandate wholesale access and resale of carrier capacity to foster competition. That Act should also explicitly empower the telecommunications regulator to order structural separation of all or part of an integrated telecommunications carrier where the regulator considers that separation would improve competition in the market for telecommunications services. The Act should permit fuller cooperation between the telecommunications regulator and the Commissioner of Competition, including the power of the regulator to delegate aspects of its decision making to the Commissioner.

3. Net Neutrality

3.1 Are current legislative provisions well-positioned to protect net neutrality principles in the future?

3.1 The new Telecommunications Act should specifically require the telecommunications regulator to pursue net neutrality in its regulatory policies and decisions respecting telecommunications carriage.

4. Consumer Protection, Rights, and Accessibility

4.1 Are further improvements pertaining to consumer protection, rights, and accessibility required in legislation?

4.1 The consumer interest should be embodied as a core objective of the new Telecommunications Act and as the key criterion in making decisions under what is now Part III of the current Act.

5. Safety, security and privacy

5.1 Keeping in mind the broader legislative framework, to what extent should the concepts of safety and security be included in the Telecommunications Act/Radiocommunication Act?

5.1 The issues of safety, security and privacy are critical to the interests of Canadians, whether individuals, business or governments. Both security and safety should be added to the objectives of the Act, while a legislative mechanism should be found to ensure that the telecommunications regulator is able to cooperate with the Privacy Commissioner on privacy issues.

6. Effective Spectrum Regulation

6.1 Are the right legislative tools in place to balance the need for flexibility to rapidly introduce new wireless technologies with the need to ensure devices can be used safely, securely, and free of interference?

6.1 It could be that a revised Radiocommunication Act could provide specifically for a requirement that devices be secured to some appropriate standard. However, manufacturers would not likely build models merely for the Canadian market. Only concerted efforts by regulators of major national markets are likely to have the power to ensure that any particular security standard is met.

The Radiocommunication Act already has the tools to monitor the security of devices sold in Canada and force withdrawal of devices that may not met safety standards. It is a matter of continued testing to ensure that products in the market are safe.

A constant problem is the after-market modification of radio devices such that their use may engender safety or interference issues. It would be appropriate to legislate in that respect, but enforcement will remain a very difficult task.

7. Governance and Effective Administration

7.1 Is the current allocation of responsibilities among the CRTC and other government departments appropriate in the modern context and able to support competition in the telecommunications market?

7.1 As ISCC has argued above, there needs to be a separation between broadcasting regulation (content) and telecommunications regulation (carriage). For the latter functions, there needs to be an ability to share information and to seek advice from other centres of expertise. ISCC has also argued that some spectrum management functions should be transferred from ISED to the telecommunications regulator. Additionally, there needs to be legislation that actually addresses spectrum management and spectrum planning.

7.2 Does the legislation strike the right balance between enabling government to set overall policy direction while maintaining regulatory independence in an efficient and effective way?

7.2 ISCC considers that the current powers of the Governor in Council in respect to the telecommunications regulator have proved to be effective and to minimally impair the ability of the CRTC, as telecommunications regulator, from making independent, evidence-based decisions. ISCC does not believe that major changes need to be made to the power of direction, those of review, nor of the power to require reports on issues of public interest.

8. Broadcasting definitions

8.1 How can the concept of broadcasting remain relevant in an open and shifting communications landscape?

8.1 The current definition of broadcasting is overbroad. It has led to the CRTC vastly expanding its jurisdiction to include internet audio-visual content services. This regulatory overreach must be reined in if Canadians are to participate in the global content market. The definition should be modified to exclude CRTC jurisdiction over all online, on-demand audio-visual content.

8.2 How can legislation promote access to Canadian voices on the Internet, in both official languages, and on all platforms?

8.2 ISCC sees no useful way in which legislation will promote access to Canadian voices on the internet. This is a matter for governmental funding and encouragement, not for legislative mandate.

9. Broadcasting Policy Objectives

9.1 How can the objectives of the Broadcasting Act be adapted to ensure that they are relevant in today's more open, global, and competitive environment?

9.1 As suggested above, many of the objectives now imposed on the licensed broadcasting system can be reframed as the criteria for public assistance to the production of uniquely Canadian content.

9.2 Should certain objectives be prioritized? If so, which ones? What should be added?

9.2 The objectives that should be given priority are those that relate to Canadian scripted programing – which has always proved the most difficult to fund and for which to find broadcasting windows.

9.3 What might a new approach to achieving the Act's policy objectives in a modern legislative context look like?

9.3 Achieving the objectives of the Broadcasting Act in the new environment means how to use private funding and public support and tax incentives to produce uniquely Canadian content.

10. Support for Canadian Content and Creative Industries

10.1 How can we ensure that Canadian and non-Canadian online players play a role in supporting the creation, production, and distribution of Canadian content?

10.1 Canadian and non-Canadian online actors play a threefold role in supporting the creation, production and distribution of Canadian content. First, they invest and distribute Canadian content. Second, they compete for profitable content, forcing Canadian private sector broadcasters to seek out opportunities to invest in Canadian content that may, through domestic and international distribution, return profits. Third, by undermining the market for Canadian distribution rights to foreign productions, private sector broadcasters are forced to develop unique Canadian offerings. ISCC views these competitive factors as real and ample contributions to the health of the Canadian broadcasting system – which has too long been at the mercy of private broadcasters who have been, at best, reluctant investors in Canadian production – especially in scripted programing.

10.2 How can the CRTC be empowered to implement and regulate according to a modernized Broadcasting Act in order to protect, support, and promote our culture in both official languages?

10.2 ISCC believes that the role of the broadcasting regulator should be less about regulation and more about support. If the Government wishes certain kinds of programs to be developed within Canada, then it follows that governmental fiscal and taxation policies be increasingly the method by which those policy goals be attained. A significant policy question will be whether domestic or foreign online services will be eligible for subsidies or tax incentives for the production of Canadian content that meets government standards. If the objective is to ensure the production and distribution of uniquely Canadian content, as opposed to propping up the licensed broadcasting system, then it would follow that online content providers should be eligible for the same subsidies and incentives as are available to licensed broadcasters.     

10.3 How should legislative tools ensure the availability of Canadian content on the different types of platforms and devices that Canadians use to access content?

10.3 ISCC believes that resort to legislative tools to ensure that Canadian content is available on the different internet based platforms and devices that Canadians use to access internet content would be counter-productive, beyond the reach of Parliament, and a serious infringement on free expression. Other tools are available to the government to ensure that Canadian content is available and findable on the internet – those should be the priority of the governmental policy.

11. Democracy, News, and Citizenship

11.1 Are current legislative provisions sufficient to ensure the provision of trusted, accurate, and quality news and information?

11.1 No legislative provisions will ensure the provision of trusted, accurate and quality news and information. No agreement can be reached on what those terms may mean now or in the future. The guarantee for a healthy marketplace of ideas lies not in legislative measures but in the free play of ideas – both those of the soft centre and those of the harder fringes. No legislative measure can hope to combat the manipulation of opinion or platforms. The protection of the public lies in an educated and informed public.

11.2 Are there specific changes that should be made to legislation to ensure the continuing viability of local news?

11.2 No legislative measure can ensure the viability of local news. Only by strengthening the economic supports for local news can its viability be made more secure. Needless to say, economic supports for particular news outlets presents its own problems in terms of invidious influences on news and editorial content.

12. Cultural Diversity

12.1 How can the principle of cultural diversity be addressed in a modern legislative context?

12.1 Cultural diversity can be one of the principles embedded in the support mandate for Canadian content given in its legislative objectives to the broadcasting regulator. While a legislative commitment to cultural diversity may be an important signal to the broadcasting regulator and the broadcasting industries, the most significant support for cultural diversity will come from choices surrounding the conditions that must be met to receive the benefit of direct and indirect government financial support for diverse programing.

13. National Public Broadcaster

This issue is beyond the mandate of ISCC.

14. Governance and Effective Administration

14.1 Does the Broadcasting Act strike the right balance between enabling government to set overall policy direction while maintaining regulatory independence in an efficient and effective way?

ISCC takes no position on this question.

14.2 What is the appropriate level of government oversight of CRTC broadcasting licencing and policy decisions?

ISCC takes no position on this question.

14.3 How can a modernized Broadcasting Act improve the functioning and efficiency of the CRTC and the regulatory framework?

A new Broadcasting Act should ensure that the telecommunications regulator is a distinct body from the broadcasting regulator. The broadcasting regulator should be mandated to consider new methods for the award of broadcasting licences. For instance, the creation of performance conditions of licence and then the auctioning of the licence to the highest bidder could be considered. This would eliminate the time consuming and contentious process of regulatory beauty contests by which broadcasting licences are currently awarded. It might help ensure that the conditions of licence are actually followed by the successful licensee.

14.4 Are there tools that the CRTC does not have in the Broadcasting Act that it should?

The broadcasting regulator should have the ability to auction licences, and maximum flexibility to lighten the compliance and regulatory burden placed on licensees.

 

14.5 How can accountability and transparency in the availability and discovery of digital cultural content be enabled, notably with access to local content?

ISCC does not believe that this to be a legislative issue, but a technological one, and readily solved by technical means and standards formation.

*** END OF APPENDIX 1***

Next Page Appendix 2è


Submission to the Legislative Review Panel

APPENDIX 2

Recommendations

 

Telecommunications Act

Objectives

  1. ISCC would like to suggest the following to replace the current s. 7 of the Telecommunications Act:

Objective

The objective of this Act is to ensure that Canadians have access to a robust telecommunications industry that delivers world-class telecommunications services using world-class infrastructure to meet the communications needs of all classes of users.

Guiding Principles

In exercising its powers under Part III of this Act, the Canadian Telecommunications Authority must:

  1. place emphasis on the interests of business and individual consumers of telecommunications services;
  2. have regard to the safety and security of telecommunications infrastructure and of the users of telecommunications services;
  3. ensure that internet service providers treat all data on the internet equally, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication;
  4. rely to the extent possible on market forces to provide telecommunications services;
  5. ensure that quality telecommunications services are available at affordable prices in all regions of Canada; and,
  6. foster the development of wholesale and secondary markets for telecommunications services. (para. 24)

Need for an Expert Regulator

  1. The telecommunications regulatory function should be separated from the broadcasting regulatory function. (para. 26)
  2. The Act should either establish a self-standing telecommunications regulatory agency or a telecommunications regulator that is functionally separate from broadcasting regulation within the CRTC. (para. 27)
  3. Appointment of telecommunications regulators should require a background in engineering, managing networks, economics, competition policy, law, or computer security. Other regulators should be appointed who have experience in the provision of internet-based services to the public. (para. 28)
  4. The telecommunications regulator should have a Chief Technology officer, whose responsibility would be to provide the regulator with up to date perspectives on technical issues that come before the regulator. The Chief Technology officer should assist the regulator to exercise a true challenge function where technological issues are said to prevent the implementation of regulatory objectives. (para. 29)

Passive Infrastructure

  1. The telecommunications regulator should be able to direct that access to infrastructure necessary be afforded to telecommunications carriers, and determine the terms and conditions, including the price at which access must be given. This issue will be particularly important as cell sizes shrink with high-bandwidth technologies such as 5G, and physical emplacements of equipment multiply a hundredfold. (para. 30)

Content of Messages

  1. Section 36 should be amended to set out the limited circumstances under which the CRTC could consent to a carrier request to alter the meaning or purpose of a communication or control the meaning of a communication: those purposes must be confined to the statutory objectives of the Act. If none can be found, then the provision should become an absolute prohibition. (para. 32)

Confidentiality of Information

  1. The Act should be amended to provide a narrower scope for the designation of confidential information. (para. 32)
  2. The Act should also provide that experts and counsel for a party to a hearing be given access to confidential information so long as it is not disclosed to the party itself (modelled on the Canadian International Trade Tribunal Act). (para. 35)The Act should permit the regulator to share information with other government departments or agencies where the CRTC might require their expertise (as, for example, to obtain advice from CSE on cyber security, or to jointly consider a telecommunications merger with the Competition Bureau). Such sharing would require that the receiving agency keep that information confidential in the same manner as must the telecommunications regulator. (para. 36)

Independent Information Gathering

  1. A revised Telecommunications Act should provide explicitly that the telecommunications regulator can seek both governmental and third-party information that may assist the regulator in deciding any matter before it. (para. 38)

Competition

Relationship to Commissioner of Competition

  1. The telecommunications regulator must be able to share information with the Commissioner of Competition, but further, the regulator should be able to seek the opinion of the Commissioner of Competition on competition-related issues. The request for such opinion and the advice provided by the Commissioner of Competition should be on the public record. The telecommunications regulator would not be bound by the opinion of the Commissioner of Competition, or accept it only partly, but would be required to explain publicly any divergence from the opinion of the Commissioner. The present provisions dealing with mergers of banks as found in the Bank Act or mergers of airlines as found in the Canada Transportation Act provide analogous provisions that serve as a model. Issues of this nature might, for instance, include assessing the adequacy of competition for the purposes of exercising the power of forbearance, or assessing the decline of competition such as to terminate a forbearance order. (para. 41)

Wholesale Access

  1. It should be an explicit objective of the Act to encourage competition and innovation by ensuring there are healthy wholesale and resale markets. (para.43)
  2. The regulator should be directed to ensure that technical barriers to wholesale and resale must be overcome, access facilitated, and any new service offered by telecommunications common carriers should be offered only when access by wholesale customers and resellers has become technically feasible and enabled. (para. 45)
  3. The regulator must abandon the notion that facilities-based competition is the only way to create a competitive market for telecommunications services. (para.48)

Structural Separation

  1. Common carriage should be required to be carried out in a corporate entity that is structurally separate from any vertically integrated, or otherwise affiliated, broadcasting or online content services. This would protect telecommunications customers who may otherwise be subsidizing the carriers’ affiliated businesses. (para. 51)
  2. The telecommunications regulator should be explicitly empowered to order structural separation between common carriage network services and other aspects of a common carrier’s business – whether broadcasting and online content, or local retail telecommunications services. (para. 53)

Net Neutrality

  1. Net neutrality should be a matter of legislative policy and not of regulatory policy that can changed at the discretion of the regulator or by direction of the Cabinet. We have above suggested wording in the statement of objectives of the new Telecommunications Act. (para 54)

Consumer Interests

  1. The objectives of the Act should make specific mention of the critical importance of regulating in the interest of both business and individual consumers of telecommunications services. We have suggested wording in statement of objectives of the new Telecommunications Act. (para. 56)

Safety, Security, and Privacy

  1. The Act should have an objective of ensuring the safety and security of communications and communications infrastructure. (para. 58)
  2. The Act should give the CRTC the power to set standards of security of networks and to oversee their compliance. (para. 59)
  3. Privacy is assigned to the Privacy Commissioner, clear mechanisms must be established to permit the telecommunications regulator and the Privacy Commissioner to cooperate on privacy issues involving the internet as well as to provide that rulings by the Privacy Commissioner may be applied by the telecommunications regulator. (para 60)

Radiocommunication Act

Spectrum Management Legislation

  1. ISCC recommends that spectrum management legislation be introduced to deal with the planning of spectrum use, the allocation of frequency blocks for specific purposes, the award of spectrum licences by auctions, the imposition of terms and conditions on spectrum licences, and the termination of licences and the refarming of outstanding spectrum to other uses. (para. 69)
  2. Spectrum management legislation could be either self-standing, or merged into a new Telecommunications Act. (para. 70)
  3. The spectrum planning and management functions should be confided to the telecommunications regulator. (para. 71)

Competition

  1. Wholesale access to incumbent wireless networks should be mandated in the new spectrum management legislation or the new Telecommunications Act. (para. 72)
  2. Matters such as tower sharing, access to poles and rights of way, spectrum hoarding, and anti-competitive behaviour should be specifically addressed in the powers given to the telecommunications regulator in the new Telecommunications Act. (para 73)

Secondary Spectrum Markets

  1. A forward-looking and market-oriented Act would include such features as:
  2. Ensuring that the sale or leasing of radio spectrum bands and their subdivision by any means that makes sense to the parties, including by geography and time are effective without regulatory approval or intervention;
  3. Providing that spectrum assets can be secured and foreclosed in accordance with current financial practices ; and,
  4. Require the registration of transfers and security interests in spectrum licences in order to be effective against third parties. (para. 75)

Fallow Spectrum                      

  1. Legislation dealing with spectrum planning and management must address mechanisms to discourage spectrum hoarding and create incentives for the transfer of underutilized spectrum to more intensive or economically important uses. The legislation should contemplate the recycling of spectrum now used for broadcasting to other uses as technology either reduces the spectrum needed for broadcasting purposes, or other technologies become the primary means for delivering scheduled programing. (para. 77)

Radiocommunication Act

  1. Apart from the creation of discrete legislation to deal with spectrum planning and management, the present Radiocommunication Act can largely be retained. (para. 78)
  2. ISCC believes that responsibility for implementing the Radiocommunication Act should remain under the responsibility of the Minister for ISED. (para. 80)

Encrypted Programming Signals or Network Feeds

  1. Paragraphs 9(1)(c) and (d) of the Radiocommunication Act that create the offence of decrypting encrypted programming signals and rebroadcasting decrypted programming, together with the right of civil action that flows from those provisions (sections 18 and 19). These provisions do not deal with true radiocommunication issues: they are properly matters of copyright infringement and enforcement. The provisions should be moved to the Copyright Act in the course of the current review of that Act. (para. 80)

Governance and Effective Administration

  1. The most consequential institutional reform would be the modification of the current combined regulator to provide two specialized tribunals: one for broadcasting and the other for wireline and radio-based telecommunications common carriage. (para 82)
  2. Second, the complexity of the issues that are now and that will in the future to be faced by the telecommunications regulator requires the telecommunications regulator seek the expertise of other agencies of government in dealing with issues that come before it. New legislation should provide for that communication. (para. 83)
  3. The telecommunications regulator should not be a law enforcement agency. Responsibility for enforcing Unsolicited Communications, Telemarketing, and CASL provisions should be conferred on the Competition Bureau or a specialized branch within ISED. (para. 86)

Broadcasting Act

General Recommendations

  1. The broadcasting regulator should increasingly be the gateway to governmental policies and programs aimed at incentivizing distinctly Canadian content. (para 89)
  2. It should be the role of the broadcasting regulator to:
  3. distribute public funds for the support of Canadian content;
  4. administer an expanded regime of tax credits, refundable tax credits and tax remissions for investment in qualified Canadian content;
  5. promote Canadian content domestically and abroad; and,
  6. aid the discoverability of Canadian content on the internet. (para. 90)

Definitions

  1. It is critical that broadcasting be defined so as to exclude purely online on-demand audio-visual content. (para 90)

 

 

Broadcasting Policy Objectives

  1. Many of the existing objectives can be imposed on the CRTC to serve as guidelines for the kind of content it should be supporting. The objectives thus become the criteria for determining who gets state support or the benefit of generous tax credits to help assist the production of Canadian content. (para 101)

Support for Canadian Content and Creative Industries

  1. Neither domestic nor foreign online content services should be subject to Broadcasting Act or to the contribution requirements that have evolved under that regulatory scheme. (para. 105)

Democracy, News and Citizenship

  1. The remedy for the kinds of manipulations that we have seen displayed on online platforms such as Facebook, Instagram or Google is digital literacy rather than digital censorship. (para.106)
  2. ISCC believes that modest investments of public funds in public digital education, perhaps combined with support for news gathering and disseminating organizations, would be superior to legislative mandates. (para. 108)

Cultural Diversity

  1. It is open to the broadcasting regulator to open up funding or incentives to what are seen to be representative organizations of particular cultural communities. (para. 110)

Governance and Effective Administration

  1. The most important step that can be taken toward better governance and effective administration of any future Broadcasting Act would be the creation of a distinct broadcasting regulator – separate from the telecommunications regulator. (para. 112)
  2. The future Broadcasting Act should establish a mechanism to permit the full deregulation of specialty services. That mechanism should be forward looking to ensure that, as over-the-air services move to alternative delivery mechanisms, they too can be relieved of regulatory obligations. (para. 113)
  3. This legislative review also provides an opportunity to explore more effective means of awarding licences, giving a greater role to market forces. (para. 114)
  4. Provision should be made in the new Broadcasting Act for consultation with the Commissioner of Competition, including the disclosure of information to the Commissioner and the publication of opinions or advice received from the Commissioner. (para. 115)

 

Interim Measures

Wholesale Access to Wireless Services

  1. The Legislative Review Panel should, as an interim measure, recommend that the Governor in Council exercise its power of direction under section 8 of the Telecommunications Act to require that the CRTC approve wholesale access by mobile virtual network operators to the facilities and services of incumbent facilities-based wireless carriers. (para. 117)

                   Report on Mandated Access to Wholesale Services

  1. Governor in Council, under section 14 of the Telecommunications Act, should direct the CRTC re-examine its framework policies for mandated access to wholesale telecommunications services, particularly the extent to which that framework
  2. advances policy objectives (c), (f), and (h) of the Telecommunications Act; and,
  3. b.deters economically efficient entry that would otherwise enhance competition and more effectively protect the interests of business and individual consumers of telecommunications services. (para. 119)

                   Standstill Direction

  1. The Governor in Council should, under the authority of section 7 of the Broadcasting Act, direct the CRTC not to extend broadcasting regulation in any form to online services pending the coming into force of a new Broadcasting Act. (para. 120)

                   Report on Vertical Integration

  1. The Governor in Council should order the CRTC, under section 15 of the Broadcasting Act and section 14 of the Telecommunications Act, to inquire into, and report back on, the state of vertical integration and consolidation of broadcasting undertakings and telecommunications common carriers in Canada. (para. 122)
    1. The CRTC should be directed to seek the advice of the Commissioner of Competition with respect to this report, and that advice should be published as an annex to the report of the CRTC. (para. 123)

 

*** END OF APPENDIX 2 ***

***END OF DOCUMENT***

The Multi Stakeholder Approach to Policy Development

The Multi-stakeholder Approach to Policy Development

Introduction

Every few hundred years or so, something occurs that transforms how people live. Sometimes the event is a technological change, sometimes it is war or revolution, or a plague, or a discovery. The printing press was one such change. The line between the invention of the printing press, the publishing of the Bible into vernacular languages, and the Reformation is clear. The Internet appears to be of equivalent importance to printing, though whether its consequences will matter as much as the Reformation, is as yet unknown.

The immediate effect of the Internet’s distributed architecture, uniform standards and globally unique addressing system was a disparity between its globe-embracing reach and the jurisdiction of the territorial state. Rather than having its management handed over to multi-lateral organs of states, the management of the Internet’s core addressing functions was entrusted to something novel: the multi-stakeholder (MSH) institution. As the Internet is principally a method of linking computers through trusted protocols and unique addresses, it made sense to adopt styles of decision-making borrowed from the world of engineering standards. These are quite distinct from state-based forms, as will be seen.

The multi-stakeholder (hereafter MSH) process is, in the view of many, a genuine innovation and adds to the repertory of ways in which decisions can be taken, consensus formed or advice developed. Some hope its advent may cause us to change the processes by which we habitually make decisions, including who makes them.

Normally decisions are made by politicians, law-makers, bureaucrats, judges, regulators and others invested with the power of the sovereign, or of the state. Citizens are normally supplicants before the organs of the state. Special procedures and specialized personnel, such as lawyers, are normally used to address courts and regulators. While elected officials are sensitive to the needs of their electorates, there are large areas of government where the citizen addresses the official not as an equal participant, but as a petitioner, if at all.

The Sovereign, or his representatives, is in the room. He or she can be represented by any number of titles and persons, but is always there. The focus is on the Decider, whoever he or she or they may be.

What if the Sovereign got out of the room for a while? What if all the players discussed face to face until a consensus emerged? Would this lead to greater legitimacy in the decisions and outcomes? Would it be more effective than traditional institutional outcomes? Are there circumstances in which a multi-stakeholder approach might be preferred to others? What are they?

This report explores these questions.

 

What this report is (and is not) about

This report is the result of my reading on the subject and of interviewing selected practitioners and authorities who have been associated with Internet or state-based governmental institutions, often both. The work occurred in the late spring and summer of 2017.

The report is intended as a pragmatic guide to what an MSH process consists of, and when and where it may be appropriate to use the MSH approach, as distinguished from others. It will seek to explain what the MSH process is and distinguish it, as much as may be sensible, from other, more well-known, types of consultation and decision-making.

I follow Aristotle’s dictum that one should pursue a subject with no more precision than the subject can bear. It is my belief that MSH processes can be identified by a cluster of attributes, so that an MSH process may be distinguished from normal interest group consultation. Yet as we are dealing with an emerging phenomenon, we must avoid treating MSH processes as if they were an ideal Platonic form: immaculate, mathematical, and never to be confused with some other type of consultative or deliberative process.

The issues under consideration are whether MSH processes are sufficiently distinguishable from other forms of state-based rule making and consultation, and whether they have been or can be more effective compared to those other forms. The first question can be answered clearly in the affirmative. To the second question, the answer is: it depends on the goal of the convenor of the process.

  • Multistakeholderism is a process, not an ideology

Milton Mueller wrote that, “as an ideology that can guide change, multistakeholderism is both radically incomplete and flawed” because “it does not provide any guidance on the substantive policy issues of Internet governance”.[1] I agree with Professor Mueller in the sense in which he speaks. I agree that if one is to consider the MSH approach to be an ideology, one would be walking on air. The subject of this report is not however an ideology but a type of process for arriving at consensus among a broad range of interested parties and facilitating better decisions. Is it sufficiently definable that we may speak of it meaningfully? I consider it to be so.

The MSH approach does not provide any guidance on the substantive issues it may deal with, unless you happen to consider the process of how you reach decisions to be a question of substance. In some cases, it is.

In this regard Laura DeNardis has highly useful observations:

It is important to view multistakeholderism not as a value in itself applied universally but as a question of what form of administration is necessary in any given context. Certain areas of Internet governance should jurisdictionally be overseen by national governments or via international treaties. Other areas are effectively administre3d by the private sector and non-profit institutions. In these cases, transparency and accountability are values necessary to create the legitimacy for those groups to establish public policy for the Internet.[2]

•           The cluster of attributes of a multi-stakeholder process can be identified

The MSH approach is a process for seeking consensus and gathering evidence for decisions.

When the substantive issues are not clear, where discussion is needed even to define the order of priorities, let alone conclude on specific points, the MSH process shows itself to have several advantages over more state-directed or lawyer-dominated forms of consultation and decision making. This was the observation of a considerable proportion of my interviewees.

The MSH process has had certain successes when the structures of how to reach consensus were not already in place, or where the challenge was reaching consensus in a novel situation, such as relative statelessness of Internet rule-making. It is also highly appropriate where, as in the case of much of the Internet, no one government may have full jurisdiction, does not know enough of the implications, or where it shares effective power with other private sector actors who alone can implement a decision. Where an apparatus for making decisions already exists, such as a regulatory agency, the MSH process can offer advantages where the fundamental issue is whether consensus can be achieved, provided that the divisions among the stakeholders are not insuperable. Even if the MSH process does not succeed in generating consensus, it can identify issues with considerable precision, as well as who takes what positions on them..

  • The MSH process may be used inside territorial jurisdictions

The question has since arisen, whether the MSH process may have advantages in some cases, even where the Sovereign may act through its normal processes to arrive at a decision.

“If multistakeholderism means only that people who are strongly impacted by policies should be actively heard from, then it is nothing but normal pluralist politics”[3]

To which I would respond, firstly, that normal pluralist politics may benefit from improved processes. The question is whether there is the likelihood of better outcomes when an MSH process is essayed rather than other consultative rule-making processes. With significant qualifications, my answer would be yes.

The MSH process has proved to have particular advantages when, as in the case of much pertaining to the Internet, the very structures of decision-making and consensus formation had to be created from scratch. It also has advantages when the issue is not restricted to making the particular set of rules and decisions, but where consensus about the need for rules and decisions has not yet agreed upon.

The MSH process has been particularly useful where the multi-national institutions that would give it cover did not exist, or operated in such a way as to exclude all stakeholders but states from the deliberations. This does not imply that an MSH process would be less effective within a given state’s jurisdiction. Inside a given jurisdiction, players in an MSH process would usually have a common culture, legal framework and a set of expectations that would assist, rather than hinder, the kinds of consensus that an MSH process seeks to arrive at. Thus MSH processes could be employed inside a national or state jurisdiction, possibly more easily than under an international umbrella.

  • The MSH process is neither a chimera nor a myth – there are conditions whereby it can be a success, and has been a success

I have also read some academics describe the MSH process as a chimera and a myth. Some have pointed out that tri-partite processes of labour, management and state have existed since the 19th century. [Nothing to see here, move on]. I doubt that anything written here will soften their views.

For myself and for most of the interviewees in this project, the MSH process has come to prominence because the Internet immediately linked the world in a framework of global communications, detached from the nation state, so that the institutions that were appropriate to governing it had to be improvised on the fly.

As it turned out, the natural rulers of the Internet’s core functions were engineers and computer scientists, and they had their own ways of sorting issues that had nothing to do with sovereignty or powers of compulsion.

It may be true that something like MSH processes pre-existed the Internet. It is also evident that the MSH process can be vitiated in any number of ways, which we will discuss. Nor do we ever escape the not-so-hidden role of Leviathan at the beginning and end, and sometimes the middle of the MSH process. One school will assert that MSH processes are chimerical because they can be vitiated in any number of ways. Others will say that, because you never get away from the state’s deciding role, MSH processes amount to a group delusion. I do not share those attitudes, and nor did most of my interviewees, however cynical and experienced they are in politics and MSH processes.

Most of the people interviewed belong to the cautious, realistic and qualified school of multi-stakeholderism. Even the deep skeptics acknowledged its existence, its features and its relative novelty, albeit with less belief that it would ultimately be all that significant.

My contentions are that

  1. the MSH approach has a definable set of characteristics and
  2. these characteristics are sufficiently distinguished from normal processes of rule-making that the MSH process deserves to be considered a new thing in the world.
  3. A process need not satisfy every criterion to be considered “multistakeholder”, but it should satisfy many of them
  4. The effectiveness of the MSH process depends on the type of problem the Convenor of the process is trying to solve.

The MSH process can be situated on a sliding scale from complete lawyerization, judicialization, compulsory power and regard for precedent at one end, to complete lack of compulsion, lack of sovereignty, and forward orientation at the other.

These contentions will not satisfy those who seek ideal forms or who insist on comprehensive conceptual clarity. Many of my interlocutors insisted that there was something fuzzy at the core of the MSH idea, and I agree with them. But fuzziness is not an insuperable bar to something being useful or being real. Others pointed out that there was no agreed definition of multi-stakeholder governance. Yet from the inception of international forums discussing the Internet[4], the term “multistakeholder” has been used, and the legitimacy of business, technical, and civil society membership in these forums has been accepted. So is everyone just blowing smoke, or is there substance to the MSH concept? The interviewees in this consultation were persuaded they were speaking of real, observed and describable processes.

The following section tries to elucidate what those criteria are, and to see whether and how an MSH process is properly or usefully distinguished from other forms of state based rule making, standards setting, and law making.

Traditional Forms of Decision Making

Traditional forms of decision-making most often involve the state, though not in all cases. They include

  1. Law making
  2. Subordinate regulations passed in virtue of laws
  3. Judicial processes
  4. Commissions of inquiry
  5. Economic regulation, such as regulation constraining actors thought to have market power, or those with economic privileges
  6. International treaty-based forums
  7. Standards setting

Of the seven forms listed above, only in standards setting is it possible for the state to accept the results of private decisions without deciding the issues for other players.

The nature and extent of the role of the state in the other six forms of decision-making distinguishes standards-setting and an MSH process from the others.

It will be my contention that the role of the state in MSH processes is, or at least should be, one of limited and very careful intervention and – most important - non-intervention.

The various forums for rule-making can be characterized by the following:

  • Who is qualified to speak? What are the restrictions on who speaks?
  • To whom is the speech directed? Who must be persuaded?
  • Is there an audience? Is the audience a participant, or is it passive?

Traditional decision-making and rule-making forums are characterized by

  • Formal legal procedures, with elaborate rules governing the presentation of evidence, the timing of responses to the acts of other parties, and well-understood legal criteria by which arguments will be judged.
  • Lawyerization – specialist presenters are relied upon to present argument or guide the presentation of argument. Frequently, only licenced professionals, usually lawyers, may be employed to make arguments. At other times, bureaucrats may substitute for lawyers.
  • In state-based treaty organizations, only states and their representatives are qualified to speak. Private sector, commercial, or non-state actors speak by permission only. Frequently private actors have to petition the state to accredit them as representatives of states in order to be allowed to speak.
  • Precedent: what has gone before, whether by way of process or by way of previous substantial decisions, has authority over the proceedings conducted in the present.
  • Speech and argument are frequently directed exclusively to the representatives of the sovereign in the room: the judges, the regulators, or the officials. Argument is from many parties to a limited set of people who participate in a decision-making capacity, but not as equals or near equals.
  • There is an audience, but the audience is not a participant. It is distinctly subordinate, and may be told to clear the room or to be quiet. The audience is there to see justice done, or to report back to principals and superiors, but it has no powers of intervention (save for largely involuntary reactions like gasps or laughter).

Law-Making

Law-making is so different in parliamentary systems compared to presidential systems that it is difficult to summarize their features. In many systems, legislators actually create the texts of laws, such as the US Congress does, with the help of staff. In others, legislation is drafted by civil servants after extensive private consultations with stake-holders. But whether legislation is drafted by elected politicians and their staff, or ministers and their staff, the will of the legislature is supreme, however it may be expressed, and whoever prepares the texts of the statute. Leviathan is in the room, deliberating with parts of itself, and outsiders are petitioners first, and subjects always. The petitioners, or lobbyists if you prefer, are addressing the state, not each other, and no one is seeking consensus, when a majority of legislators will suffice. The decisions of legislatures carry all the authority of the sovereign state, and may compel obedience.

 

Engineering Standards processes

The first thing to be said about multi-stakeholder processes is that they have emerged, in the Internet context at least, from the kind of discussion forums dominated by engineers, rather than by lawyers. From this difference much else follows.

The Internet is the creation of engineering standards for the exchange of information between Autonomous Systems – computers under common control. This will surprise many people who imagine the Internet is something physical, or the information carried by networks according to standards, but not that the Internet really is a collection of standards. The need for globally unique identifiers meant that there would be a centrally coordinated administration of address assignments. Domain names added another central point of management. Domain names and addresses at first were managed by a single individual working on a set of rules developed as needed, but soon came to be managed by not for profit corporations, often membership-driven. The institutions concerned in the management of the Internet’s central resources and standards -names, numbers and protocol parameters – were from the start composed of commercial interests of various kinds.

The Internet is inherently not bound to the territorial borders of states, nor was it the creation of lawyers or treaties. It leaped ahead and outside of the state system from the moment of its creation. It was the creation of computer scientists. For the engineers, the model of governance at hand was the way they have habitually settled technical issues.

The most perfect example of the MSH form of rule-making is the Internet Engineering Task Force. It is governed by expertise and status accorded to engineering-scientific talent: what the political scientists call an epistemic [knowledge] community.

  • Little or no restriction applies formally to who may attend or participate, save the cost of getting to meetings or participating electronically.
  • It is expected that commercial entities will be present. Commercial interests are held to be legitimate, and normal.
  • State-based entities have no extra status, nor are they given more weight than their technical arguments may merit.
  • Precedent may have some persuasive force in how procedural disputes are to be handled, but the focus is on designing the future, not conforming to the past. Justice is not being sought, good design is.
  • There is no hard and fast distinction between the audience and the participants, indeed, everyone present is expected to contribute.
  • There is no specialist professional class of arguers and no specialist class of deciders.
  • Consensus need not be perfect but, in the absence of authoritative rule-makers and opinion deciders, consensus is as good as it gets. Hence “rough consensus and running code” expresses a deep truth about how the IETF works.
  • Absence of agreement and other problems can be handled by the establishment of other working groups, by sidelining the troublesome in irrelevant groups, and by abandoning the idea. There is no force other than self-interest that compels agreement.
  • Standards have no legal force; they are accepted or they are not, ignored or adopted, as the interests of the parties may direct.

I cite Dick Beaird on this subject: The IETF participants “are assisted by the fact they are operating within the laws of physics”[5]. We now turn to those processes where the laws of physics do not necessarily set the outer boundaries.

Multi-Lateral processes

Multi-lateral organizations are those which have been set up by states, which are conceived as the sole authorized representatives of power in exclusive territorial units. Private interests are permitted to join delegations and speak only with the permission of their respective governments. Thus while their processes need not be dominated by lawyers, and argument is not directed to a single sovereign with deciding power, multi-lateral organizations are the organizations we have evolved to let Sovereigns speak in the same room.

Multi-lateral processes, I will venture to say, resemble multi-stakeholder processes in one essential regard: all states are equal, but some are more important than others. They are in this sense slightly akin multi-stakeholder processes, though with only one kind of stakeholder allowed, sovereigns.

Multi-stakeholder (MSH) processes

Where do we locate the MSH process in a spectrum from court-room trials at one end and places like the IETF at the other?

It is evident that an MSH process partakes of many of the attributes of an engineering standards forum, and is furthest removed from a trial in a court room. It sits closest to the engineering standards process in the linear spectrum. The properties that make it so include:

Openness

  • freedom to speak, write and otherwise contribute
  • speech is not organized around specialized interlocutors, such as lawyers
  • speech is not exclusively addressed to agents of the sovereign in the room
  • records of contributions, emails, are open and accessible
  • meetings are announced, secret conclaves are generally shunned

Organization

  • stakeholders self-identify as such
  • there may be a pre-existing set of stakeholder constituencies that self-organize, elect their chairmen and officers, and caucus within the constituency first before seeking consensus with other constituencies
  • in the absence of such pre-existing constituency organizations, it may be necessary to allow time for them to self-organize

Role of government

The MSH process is not like an engineering standards process in several ways:

  • It has been convened for a purpose by an outside, usually governmental, authority
  • While the agenda of the MSH process may be refined by the stakeholders, and otherwise adjusted, the convenor may want a decision or a consultation, or the development of consensus, to occur
  • The convenor will probably want to establish in advance of the process boundary conditions for the range of acceptable outcomes
  • The convenor will want to strike a balance between clarity in range of acceptable outcomes (his purposes), and enticing the major powers among the stakeholders to attend (their incentives to attend and take the process seriously)
  • The convenor may also play a role in recognizing some groups and not others, or subsidizing some groups to attend and not others, or favouring the election of some people and not others as agenda setters or chairmen of constituency groups. [The convenor does so at considerable risk].
  • The convenor, or some trusted body, will pay for the maintaining email listserves, conference calling facilities, and other forms of connection and record-keeping.

 

Openness?

I observe that the MSH process borrows heavily from the style of proceedings in engineering forums like the IETF. With important qualifications, participation is more open than in any forum more dominated by legal process.

Participation is not reserved for special professions and presenters of argument; there is no audience - there are in theory only participants; commercial interests are accepted as normal, diverse and competing points of view are argued without privileges for some points of view. Truly stupid points of view are shunned.

The stakeholders

In Internet circles, the composition of the stakeholders has included representatives of the technical communities, businesses, civil society groups, and governments. It must be emphasized that the parties with direct commercial interests in the outcome cannot be excluded. It is they who must agree to whatever constraints that might be put upon their profits or property rights[6].

Several interviewees emphasized that in an MSH process, all were included, though not all were equal. Inequality is in part determined by the degree to which a party may be impacted by the consensus or may have to be relied upon to implement the agreed upon thing

We shall address the question of representation and representivity further in this paper. Nevertheless, any issues that might exist in an international forum, including a global forum, shrink to relative insignificance if an MSH process is confined to the territory of a nation-state.

In Internet circles, the groups that have had influence and which must be persuaded to participate have included:

  1. A technical community that develops the software standards and applications for a digital environment. They include the IETF, the W3C, and the Internet Society, and should include any of the many developers who inhabit the technical forums of the Internet.
  2. Advocacy groups focused on digital rights, such as for privacy, or affordable access and connectivity.
  3. Internet-based businesses, such as content providers (Netflix, Google), Internet service providers of all sizes. Generally, these groups favour global access, interoperability and open markets.
  4. Various institutional actors may also be included if they show or have shown interest in the particular Internet-related issues being addressed by the MSH process: the Regional Internet Registries, ICANN, the OECD.

These are rough groupings. No definitive list can or should be devised, as the intention of an MSH process is to include a wide enough spectrum of interests that the resulting consultation, or decision, benefits from the legitimacy imparted to the process from the inclusion and participation of the relevant actors.

In short, the invitations may go out, but who shows up will be out of the control of the Convenor, and ought to be.

Representation and Representivity

A word about representivity, which concerns the adequacy of representation. The legitimacy of deliberations and proceedings is frequently challenged when the groups partaking are held not to be sufficiently representative. Failure to represent can take several forms. A group can be held not to represent the full scope of affected stakeholders or held not to actually represent or to be acknowledged to represent the stakeholders that they claim to represent. It will be a delicate practical problem for the Convenor to decide how many to invite to the MSH process, or whether anyone can be excluded. Something artful can be arranged to ensure some groups show up without necessarily excluding others. Arithmetically it is impossible that a smaller group of any description whatever (the representatives) can be as diverse as the larger groups (the represented). Representation substitutes for participation by all conceivable groups, and it cannot be otherwise.

Second, an engineering standards process is less beholden than some others to geographical, sexual, cultural, regional, or religious representation. Concerns for representivity are bounded because the organization as a whole is concerned with the laws of physics and whether and how problems can be solved by better or worse technical ideas. It might split on Apple versus Microsoft lines, but is less likely to split on the other considerations mentioned, than bodies not bound to the laws of physics

An MSH process has to be concerned with more than technical competence. It has to devise politically and technically acceptable solutions or compromizes. The ruled have to give their qualified blessings to the rules. The legitimacy of the process generates public acceptance of the outcomes. But representation, particularly of consumers and the public, will not be perfect. Hence the importance of getting the right people in the room but not excluding others.

Records must be kept

Another important attribute of openness or transparency is the degree to which all meetings are open and ideally receptive to remote participation; that all discussions are recorded, that a trail of email or other documents is available and searchable; that email lists may be freely joined; that a secretariat exists and acts neutrally among parties. Keeping track of the discussions and recording who said what, when is an essential element of the MSH process. Multistakeholder processes without adequate records to demonstrate the openness would fail the critical test: do participants have confidence in the process?

Open records and invitations to meetings also allow progress to occur. If a group of thirty or so people has had an open meeting, kept recorded discussion or discussion thread, and come to a conclusion, it is then possible for the group or group leaders to tell a dissident that the discussion is closed. The issue may be raised again in the general assembly at any time by any participant. But the group must have power to declare that a particular point has been settled, if indeed this is the case.

Caucuses, Constituencies and Sub-Groups

It may be necessary to encourage groups to find ways of convening in caucuses or interest groups. This will have the effect of causing discussion and resolution of issues to take place within kindred interest groups. It is more likely that interests can be aligned within caucuses or subsections of the whole that profess similar ideals and goals

The formation of caucuses or sub-groups within the general assembly is a natural event. The IANA transition, for example, benefited from the pre-existence of constituencies and working groups within the ICANN structure which had had long experience in electing their leaderships, keeping minutes and discussion threads, maintaining websites, and working with other constituencies within the ICANN structure. Leaders, positions and personalities were known to each other.

One of the significant difficulties I can envisage is that, if an MSH process is convened and there has not been experience among the stakeholder groups in forming caucuses aligned on mutual interests, it may take considerable time for some of the groups to self-organize. The IANA transition process was delayed in part because one of ICANN’s constituencies needed a long time to self-organize, and this was so because it had not previously been in the habit of working together.

The other advantage of constituencies within an MSH process is that it leads to the creation of a set of chairmen or spokesmen who can work collectively to manage issues and drive progress. Internal decision-making structures within a constituency allow for the discussion and resolution of issues in manageable bits. The leaders of such groups, having been selected by their constituencies for that role, are in the position to make the necessary trade-offs and compromizes that constitute politics.

The role of the state

Where the MSH process differs from engineering standards-setting is that the state has most often played a part in setting up the process, in assisting some groups to be present and not others. Above all, some agent of the state has probably selected the boundary conditions of the MSH process. These boundary conditions include such matters as:

  • The reasons why an MSH process was selected.
  • The goals that are expected to be achieved by the process; the criteria of success or failure.
  • The outcomes that are considered unacceptable to the Convenor

The question that arises throughout an MSH process is the degree of responsibility left to the participants. The autonomy granted by government to the MSH process is the most delicate and important matter, in my view. Larry Strickling, former head of the NTIA and a strong proponent of MSH processes,[1]told me that they key question for participants is: Are we involved in a consultation? Or making a recommendation? Or in making an actual decision?

Where has decision-making been vested? If decision making has been vested with the group or groups in the process, then everyone is forced to the table. It is vital, he said, that there be no separate channel for a collateral attack at the end of the process.

The art of holding an MSH process is to give enough incentive to the participants to commit at the front end.

Yet, numerous interviewees emphasized that one never gets completely away from the state. The entire process has been set up for a reason: either a consultation or a decision. Yet, as we saw from the IANA transition process, the state in the person of Larry Strickling of the NTIA established boundary conditions: conditions which, if met, would cause him to accept the results, and if not met, would have caused him to maintain US hegemony over the IANA functions contract.

It follows that an MSH process does not exclude the state or states from the process. Here we must be careful about the intentions of the state, which remains in most cases the decider. From my discussions with participants in various Internet forums, an MSH process is as much about the intention of a government which might engage in it as any other factor. Government capture of the process might wreck it. But lack of government participation, as sponsor, as listener to the results, would obviate the incentive of the stakeholders to participate.

We need to be careful about how we speak of the participation of states in an MSH process. Two cases present themselves: inside a nation-state, and internationally.

If an MSH process is being conducted inside a national jurisdiction, it is much easier for representatives of the government holding the process to leave the room, and let the other players sort out the issue. Or the actual deciders can leave the room while possibly other portions or sectors of government might participate, if that were found agreeable to the government holding the MSH process to act that way. In either case the stakeholders are not required to deal with states inside the MSH process, where all players have equal rights but some players are more important than others.

If the context of an MSH process is international, so that multiple states are involved, then we have a quite different situation. The most important recent example was the MSH process on the IANA transition. There the United States held a unique role as the lone state with authority over the IANA. Other governments assembled in the Government Advisory Committee (the GAC), which acted within the bounds of the IANA transition process. Now that the IANA has transitioned away from US jurisdiction, it is difficult to imagine the circumstances in which one state will ever again hold formal decision-making powers over other states in an Internet body.

 

You do not finally escape the state

The idea that the state might be the Convenor of an MSH process, and the ultimate decider of its outcome, will be found unsatisfactory by some. A libertarian might challenge the idea that an agency of the state might set terms for the MSH process. Is not the whole purpose of the MSH process to replace state-based decision making?

Not necessarily. If the MSH process offers superior chances for the creation of trusted consensus solutions, relative to a normal regulatory process, then despite all its drawbacks: duration, complication, fuzziness of outcomes, its openness to gaming of various kinds; then an MSH process may offer to governments a better way to formulate policy.

As Dick Beaird told me “The multi-stakeholder process is a form of public, transparent consultancy. You don’t escape government… I don’t know how you escape the authority question”[7]

We must be careful about too much categorical thinking in relation to the role of the state in MSH processes. Leviathan may leave the room for a while or engage in much less hierarchical behavior within the room, in order for the process to work out. In the words of Robert McDowell, a former FCC commissioner, “Governments should not own the table”.[8] That expression captures well the sense of government pulling back from framing all questions, and determining all matters, and sharing with other players, in some smaller or greater measure, responsibility for the outcomes.

 

Drawbacks, disadvantages

My interviewees pointed to the following issues, some of which are inescapable. Quotation marks indicate direct statements by an interviewee. As a rule I have kept them anonymous for reasons that will appear obvious.

  • The MSH process cannot cause people to come to agreement when their interests are sufficiently at variance.
  • There will be cultural attitudes that prevent agreement on certain issues. Differing approaches to privacy in the United States and Europe were cited as an example of an unbridgeable gap.
  • The MSH process is consensus driven, where consensus is hard to achieve.
  • “The MSH process is not inherently more just or moral than others which are more directly governmental in nature.”
  • “The Geneva types can turn it (the MSH process) into a representivity game”.
  • “Its frailty is the tyranny of the minority”.
  • Nothing says that stakeholders are of equal importance. Power is asymmetrical.
  • Those with money and expertise will always be advantaged.
  • You must have clearly identified stakeholder constituencies/subgroups in order to narrow the range of outcomes and expedite decision-making.
  • “Don’t discount the value of something someone says because of the interests he represents”
  • “It is a challenge when one of the idiots is a major player or a state.”
  • “The pace of MSH processes can be glacial. They tend to self-complicate, at a fractal pace. Each working group uncovers new problems”.
  • “Not every decimal point should be chased. A good-enough solution can be right in front of you”.
  • There will be great reluctance to admit failure. In some cases the inability to declare failure will drag the process on.
  • MSH process enthusiasts believe it is inclusive but it is not; those with money and time can show up and build coalitions; those who cannot afford it are out of the game.
  • “If you can’t declare the conditions for failure or success at the outset, you can’t succeed.”
  • “The MSH process can work only with a modicum of trust and respect.”

 

 

Conclusion

In the MSH process, the means whereby we arrive at a rule is the process of legitimizing its acceptance. In certain novel situations that the Internet has generated, where there was neither a pre-existing forum nor an agreed agenda, the use of the MSH forum has bestowed legitimacy on decisions that could not otherwise have been taken.

The promise of the MSH process is that when states will be faced with similar problems: incomplete jurisdiction, inadequate understanding of the nature and priority of the problems, a need to engage the public in the possible solutions, and a degree of technical complexity that challenges the knowledge base of most participants, the MSH process will prove suitable.

The MSH process is not swifter than a process of inquiry by an efficient investigator, it is not as knowledge-driven as an engineering standards forum, it is not as concerned with the protection of the weak by the operation of law as is a trial, and its standards of evidence may be rougher- hewn. Nevertheless, the successful MSH process has the effect of legitimizing its outputs, and narrowing differences, if the Convenor can have the wit and patience to frame the conditions for success and then let the parties engage in it.

The Convenor has a delicate task, to attract the kinds of parties to the process that can adequately deal with the topic, and to leave enough freedom to the assembly to devise the outcomes in the confidence that the stakeholders will be heeded. Thus the Convenor must find terms on which he can bind himself to accept a range outcomes, and leave no incentive to any party to go around the process. If these conditions can be met, the MSH process offers a useful method for addressing complex and novel problems.

=============

Addendum

Table for the Convenor’s Consideration

  Who defines the issue

Who is affected by the issue

Who needs to be involved in the issue Who decides the issue Who implements the decision
Government          
Private Sector          
Technical experts          
Civil Society          
etc.          

Appendix A

Interviewees

 


[1] See the list of interviewees given in Appendix A for details of the person and the interview date

 


 

1.         Bill Graham, Victoria BC, former writer for the Internet Governance project, June 16, 2017 and 27 August, 2017, This email address is being protected from spambots. You need JavaScript enabled to view it., 778 433 3539 (My thanks to Bill for his careful comments,from which the written report has greatly benefitted).

2.         Professor Jeanette Hofmann, Professor, Internet politics, Freie Universität Berlin, tel. 49 30 25491 288, June 16, 2017

3.         Mike Godwin, R Street, Washington DC, 1050 17St NW Washington DC, Suite 1150, This email address is being protected from spambots. You need JavaScript enabled to view it., 202 763 3307 20 June, 2017

4.         Larry Strickling, former head of NTIA, This email address is being protected from spambots. You need JavaScript enabled to view it. , 312 343 1500, 21 June 2017

5.         Daniel Sepulveda, former US Ambassador to ITU and internet institutions for Obama regime, 21 June 2017, This email address is being protected from spambots. You need JavaScript enabled to view it.

6.         Sally Wentworth, Internet Society, This email address is being protected from spambots. You need JavaScript enabled to view it. tel 703 439 2146, 22 June, 2017

7.         Ambassador David Gross, This email address is being protected from spambots. You need JavaScript enabled to view it., 202 719 7414, 5 July 2017

8.         Byron Holland, President of CIRA, This email address is being protected from spambots. You need JavaScript enabled to view it., 5 July 2017

9.         Hiroshi Esaki, WIDE project consortium, Japan, http://hiroshi1.hongo.wide.ad.jp/hiroshi/ 6 July, 2017

10.       Tim Polk, director for Internet Security Standards, National Institute of Standards and Technology (NIST), This email address is being protected from spambots. You need JavaScript enabled to view it., 301-906-2813, 6 July 2017

11.       Robert McDowell, former commissioner, FCC, partner in the Communications regulatory, Digital media & entertainment, Telecommunications, etc. practices at Cooley LLP, This email address is being protected from spambots. You need JavaScript enabled to view it., 201 251 4640, 7 July 2017

12.       Richard Beaird, former Senior Deputy United States Coordinator for International Communications and Information Policy, and Office Director for Multilateral Affairs within the U.S. Department of State’s Department of International Communications and Information Policy (CIP), associate at Wiley Rein, Washington, This email address is being protected from spambots. You need JavaScript enabled to view it., tel. 540 461 8639, 10 July, 2017

13.       Akinori Maemura, General Manager of Internet Development Department at Japan Network Information Center (JPNIC), This email address is being protected from spambots. You need JavaScript enabled to view it. 81 90 7014 5225, 11 July 2017

14.       Gordon Goldstein, Managing Director - Head of External Affairs at Silver Lake Investments, and Senior fellow, Council on Foreign Relations, This email address is being protected from spambots. You need JavaScript enabled to view it. 1 877 668 4493 x 807 935 015, 12 July 2017

15.       James Bladel, Vice President of Policy, Go Daddy Inc., This email address is being protected from spambots. You need JavaScript enabled to view it. , 21 July, 2017

16.       Kathy Brown, President, Internet Society, This email address is being protected from spambots. You need JavaScript enabled to view it., 703 447 4677, 9 August, 2017

17.       Richard Shockey, Chairman, SIP Forum, This email address is being protected from spambots. You need JavaScript enabled to view it., 703 593 2683, 25 August 2017

18.       Professor Fen Hampson, Centre for International Governance Innovation, co-director, Global Commission on Internet Governance, This email address is being protected from spambots. You need JavaScript enabled to view it., 613 769 1004, 29 August 2017

19.       Professor Milton Mueller. Georgia Institute of Technology, This email address is being protected from spambots. You need JavaScript enabled to view it.. 315 254 3242, 12 September 2017

20.       Allan MacGillivray, Director of Policy, Canadian Internet Registration Authority, 14 September, 2017, This email address is being protected from spambots. You need JavaScript enabled to view it., 613 760 3300

Endnotes

  1. Mueller, Milton Networks and States: The Global Politics of Internet Governance, The MIT Press, 2010, page 264
  2. Laura DeNardis, The Global War for Internet Governance, Yale University press, 2014, page 227

 

  1. Muller, ibidem, page 266
  2. See for instance the Tunis declaration of 2005, paras 73 and following at http://www.itu.int/net/wsis/docs2/tunis/off/6rev1.html
  3. Interview 10 July 2017
  4. Ambassador David Gross, 5 July, 2017, James Bladel, VP Go Daddy, 21 July 2017
  5. Richard Beaird, in discussion, 10 July 2017
  6. Interview July 7, 2017

The True Faith of Internet Governance

{This article originally appeared in CircleID on February 3,2015}

A portion of me sympathizes with Richard Hill. He argues passionately in his recent article, “The True Stakes of Internet Governance”[1] for a statist position on Internet governance. It is hard to be an unheeded prophet; difficult to take positions that are not in the comfortable mainstream of what, as you perceive, are lemmings heading for the cliff. I know the feeling.

Anyone who has been acquainted with a few ICANN meetings, or read Milton Mueller’s caustic description of the origins of ICANN, which saw it as a compromise negotiated between two contractors to the United States government[2], has probably developed a degree of cynicism regarding “bottom-up consensus” policies. ICANN is accountable to no one but the US Department of Commerce, and the oversight is benign and limited. The almost casual way in which the United States established ICANN, as a California not-for-profit corporation on a contract to the US Department of Commerce, causes me to wonder why anything as important as the Internet’s naming and addressing functions was founded on so flimsy a basis as a government contract, or that its decisions can held up by a member of Congress protesting to the Department of Commerce.

Yet, as soon as one thinks about the issue, the answer appears: people did not want another ITU[3], at least the people who mattered in the Clinton administration in the late 1990s. Many rational observers think that they were largely right in that decision, even if ICANN does not merit anything but guarded approval.

My purpose here is to address the arguments raised by Richard Hill in his paper. They are serious, and deserve consideration and, to a great extent, refutation.

We are not comparing Platonic ideals

In matters of practical judgment, such as here, we are not comparing Platonic ideals of participation, equality, and representivity, on the one hand, and ICANN on the other: we are comparing two flawed institutions. This is the major weakness of Mr. Hill’s propositions. Mr. Hill’s arguments could have been made more effective by addressing the obvious faults of the alternative to ICANN, that is, the ITU, which he fails to do.

Mr. Hill has produced an admirable statist manifesto, which however moving, assumes what needs to be proven, or at least reasonably demonstrated: US corporate influence bad, state influence good.

As he describes the operations of ICANN and its supporters, he makes constant appeal to the unstated premise that weakening the power of states is by its nature, bad. This is not necessarily or always so.

The second and related premise from which Mr. Hill’s criticism of US dominance of the Internet proceeds is a deep distaste for commerce itself. If the distaste is not for commerce itself, it is for the power that commerce wields in US Government decision-making, and in its creature, ICANN. Much as one might sympathize with a critique of US political culture and law-making from this point of view, his argument neglects to engage in a balanced consideration of the evils of commercial influence in decision-making versus the evils of governments as decision-makers.

My premises

As I am criticizing Mr. Hill’s premises, I should be clear about mine: to cite Disraeli, “power has only one duty – to secure the social welfare of the people”. The competing governing arrangements for the Internet are to be weighed in that balance.

My second is that the Internet has and continues to accomplish a revolution in the application of computers to problems, in human potentials through networks, and to the transformation of business models, which cannot be resisted but which must be adapted to.

My third is that governments have a useful and essential role to play in setting standards, enforcing rules, and endeavouring to achieve the public good.

My fourth is that businesses have legitimate interests in the evolution of these standards and rules, and benefit as much as consumers in sound government and the enforcement of sane rules.

Money at Issue

Let there be no confusion on this point, that though the essential criterion by which these political institutions may be judged is human welfare, the motive that animates many partisans of the ITU/statist position is outrage at the loss of their economic privileges and subsidies, which were secured in the pre-Internet regime. How this outrage has been elicited by the Internet is worth telling.

Before the Internet was created, what we now call ‘applications’ – a post-Internet term - were embedded in hardware and charged out as “services”. Changing the functions of a telephone system was nigh impossible, because mechanisms had to change end-to-end, costing billions. The advent of the Internet Protocol suite dissociated the applications from the transport of signals. In the language of the Open Systems Interconnection (OSI) model[4], layers one through three remain the carrier’s concern, while the applications (layer 6) belong to the new players. Since the old telecommunications providers had essentially one “application” – as the term is now understood –voice telephony, the Internet has had the same effect on telecommunications carriers as Uber promises to make in taxi licensing. The monopoly profits and empires that were created out of the legal privileges to operate a telephone company have been nearly annihilated by the Internet. In particular, even if a country wanted to pursue an indigenous socialist telecommunications policy, the international subsidies on which so many state-owned telephone companies relied have evaporated.

My first acquaintance with Internet politics came from a study I and some colleagues conducted in 1997 of International Charging Arrangements for Internet Services. The study was commissioned by and Asia-Pacific consortium of nations, which were shocked and consternated that the Internet’s revenue flows did not work on telephone settlement principles.[5] Many telephone ideologists are still seeking political arrangements that would have the effect of enabling them to recover their lost subsidies.

Accordingly I do not as a rule use the term “the Internet” in the broad sense in which Mr. Hill uses the term (p.3), which conflates applications, protocol layers and transport. When considering Internet-related matters, one must keep in mind the separation of functions between transport and applications. The Internet broke up what used to be a unified industrial structure, and allowed new players to scoop up revenues that the carriers persist in thinking belong to them.

Just as with cars and roads, we are interested in the cars, rather than the roads, even though roads cost way more. The Internet revolution has metaphorically dispossessed the builders of roads from the profits they were able to extract from the old business model. The car manufacturers are the applications makers, and the road makers – the carriers - are annoyed that they are not getting the money they used to from running their toll roads on “cars” – voice channels - they rented to users.

As Mr. Hill demonstrates, the old order does not lack for defenders.

The Main Arguments of Richard Hill

Mr. Hill’s main arguments are that

  1. The current system, which features the participation of commercial interests, cannot for that reason be democratic. The governance of the Internet by nation-states, whether acting alone or by treaty organizations, is more democratic.
  2. The services provided by transnational corporations are in general monopolistic;
  3. The power of the transnational corporations limits the power of governments to build out the necessary communications infrastructure, and that this power is increasing rich-poor inequalities
  4. Arrangements for the governance of domain names and IP address assignments have something to do with international income transfers, or surveillance by security agencies, or network neutrality, or transborder data flows.
  1. The democratic deficit

Mr. Hill argues that the current governance model – the multi-stakeholder model – is largely undemocratic “because it is dominated by a professional coterie of representatives of commercial and political interests” (at p.2) and that the role of transnational corporations in policy-making is “blatantly undemocratic” (at p. 5).

Corporations are not democracies; but they are run with an acute sense of what the public wants and, if they fail at this task, their competitors, shareholders and boards of directors will see that their management is replaced.

Mr. Hill argues (p.5) that the role of transnational organizations cannot be in the public interest “because, by definition, the role of private companies is to maximize their profits.” He allows that telecommunications markets have been ‘natural’ monopolies[6], and that is why we have national governments to constrain them.

There are several errors of omission here.

  • The democratic deficit of ICANN’s way of proceeding is never measured against the democratic deficit of the ITU’s way of proceeding. Both are dominated by coteries, but the selection process differs fundamentally. In the case of the ITU, the coteries are composed of officials and delegates of states; in the case of ICANN they are composed of delegates of companies of many sizes, states, lawyers representing intellectual property interests, and others.
  • Governments have often favoured their telecom suppliers as national champions, have defeated attempts to introduce competition to them, and have used them as cash cows to bolster government revenues, despite the fact that they could collect more revenues by liberalizing telecommunications carriage. Governments are not necessarily the friends of consumers. The more corrupt the state, the less it can trust the tax system to produce revenues, so it resorts to pillaging the national carrier for revenue.
  1. Transnational companies are offering monopolistic services, and the Internet is increasing the influence and importance of transnational capitalism

I can see it now. It is the year 1580AD. Any ship tough enough to sail the North Sea, and possessing jib sails, is tough enough to get around the Cape of Good Hope and reach India, and later, the Spice Islands of what is now Indonesia. Transnational companies, such as the Dutch East India Company, and Portuguese, English and French rivals, are increasing the influence and importance of transnational capitalism, aided and abetted by national governments in Atlantic-facing Europe. They are also eliminating the profits of the Republic of Venice and the Islamic countries between India and Europe in the spice trade, by ending their spice monopolies based on overland transport.

The drive to avoid the Islamic powers’ control of the spice trade caused Christopher Columbus, a Genoese sailor, to be commissioned by Ferdinand and Isabella of Spain to sail west, and we all know what trouble that has led to: more transnational capitalism from that British offshoot of transnational capitalism, the United States.

This time it is the Internet, and those wicked Atlantic powers are at their old game of world domination through better communications, again. After 500 hundred years of western Atlantic naval hegemony, the capacity of some people to be shocked, shocked! by the eternal search for power is a continuous source of wry amusement.

More seriously, the argument that the new applications providers are engaging in monopolistic pursuits is risible. Infrastructure monopolies have been favoured by the kinds of states that favour greater ITU control of the Internet, so there is a large element of pot-calling-kettle-black here. Further, monopolies in applications are constantly challenged or routed around. They are susceptible to low-cost entrants with superior code. Fundamentally, the Internet creates a market as large as all connected devices in anything conceivable. A competitive advantage in code may prove to be much more important than a competitive advantage in possessing physical apparatus, it is true, but the success of some companies in occupying Internet niches is no guarantee they will not be replaced, diminished or made obsolete. Think of Microsoft’s “monopoly” over operating systems.

  1. The power of the transnational corporations limits the power of governments to build out the necessary communications infrastructure, and that this power is increasing rich-poor inequalities

Once again we observe a confusion of applications with transport. It is true that the international voice calling subsidy regime has been rendered irrelevant with the decline of very expensive voice-minutes of long distance calling. The voice calling “settlements” regime served as an important income transfer mechanism from callers in the First World to telephone companies and governments in the Third World, if I may be permitted such obsolescent terms.

Governments in many parts of the world understand the Internet as an agency depriving them of accustomed opportunities to raid their national champion for revenues. States have regulated domestic telecom operators to achieve many purposes: consumer protection from monopoly power, regional transfers of income from callers in one region to callers in another, as opportunities to engage in graft through corrupt licensing practices, and as means of keeping unionized telecom workers quiescent and loyal.

Nevertheless, none of the purposes for which governments enable infrastructure to be built is affected by the existence of the Internet, and the transnational suppliers of applications. If the Internet deprived the local national monopoly of its international voice revenues, there are plenty of ways of solving that problem than insisting on global control of applications providers, through a state- based treaty organization, which is really what Mr. Hill insinuates is necessary. If this issue were about telecom investment in poor countries, it would be difficult but relatively easier to solve. Money could be found. But it is not about money; it is about who controls what, as Mr. Hill recognizes.

Mr. Hill also believes that the power of multi-national firms, assisted by their control of ICANN, is increasing global disparities. There is not room to engage in statistical refutation of this oft-repeated nonsense in this paper. I invite you to take a simple test. Look at the labels on your clothes. Until recently, I never saw “Made in Cambodia”. I thought Cambodia was the place where the communists slaughtered a third of the population to achieve an earthly paradise. That was 1975. Today Cambodians make shoes and shirts. Manufacturing is shifting as the Industrial Revolution moves from Lancashire to Borneo in the space of 300 years, moving through Japan, China, Poland, Mexico, Brazil, Cambodia and every other country on its way.

The second point about income disparities is the role of intelligence. In an interconnected world, the intelligent are be able, through computers, to reach markets across divisions of nation, ethnicity, class, religion, and caste provided they have connectivity – which is an infrastructure question under the jurisdiction of local governments.

Income inequalities within countries are increasing, as the working classes in older industrial countries are confronted with immigrant labour, and as products and services can be manufactured off-shore. The increase of domestic and international competition is powerfully assisted by global communications, as it has been to date by the jib sail, coal-powered ships, turbines, the telegraph, and international standards, such as the shipping container and the interconnected telephone network. Competition is not only increasing between states, it is increasing within states. The increase of domestic and international competition is a feature of existence, and a far deeper phenomenon than ever the regulation of applications providers by treaty-based organizations could solve. None of these phenomena arise from ICANN’s particular structure, and none is cured by submitting applications providers to the jurisdiction of the ITU.

  1. Arrangements for the governance of domain names and IP address assignments have something to do with international income transfers, or surveillance by security agencies, or net neutrality, or transborder data flows.

The importance that people attach to ICANN’s monopoly in issuing domain names never fails to surprise me. Has no one factored in the efficacy of search engines in finding resources on the Internet without any help or hindrance from domain names? The whole domain name look-up regulated by ICANN works on an agreement to use a common root server, one that can be readily avoided – I am told - by a few clicks of one’s computer.

As to IP address assignments, the world is on track to break through the limitations of IP version 4 and get to the squijillions of numbers available in IP version 6. There will be IP addresses for each of your shoes, credit cards, shorts, keys, and you, if you want them, as soon as people find a use for addressing their belongings. Street lamps need addresses. Any object we can conceive will findable on the Internet with its IP address.

As to the relationship of the influence of transnational corporations on ICANN, on the one hand, and the surveillance of the Internet by state security agencies, I fail to see one. Computers have been invented, encryption is here to stay, and codes will be broken, sooner or later. None of this has anything to do with ICANN or the ITU.

Whether or not “mass surveillance can be stamped out by legal means”, as Mr. Hill proposes[7], I fail to see the relationship of ICANN or the ITU to any of this.

Net neutrality is another irrelevant rabbit Mr. Hill is chasing after. I sat on a panel of Canadian telecommunications regulators that passed a well-received judgment[8] on Internet traffic management procedures, which included net neutrality. It had nothing to do with ICANN, the United States, or transnational corporations. So far as I have been able to tell, the Obama regime has not seen fit to replace Canada’s current government for helping content creators against carriers, or carriers against denial of service attacks.

As to that old shibboleth, controlling transborder data flows[9], the mercantilist dream never dies. If it is better for data not to cross borders, then build internet exchange points within one’s country. That is entirely a matter of local jurisdiction.

So what is bugging Mr. Hill?

What Mr. Hill appears to me to propose is that national governments, assisted by the local telecom operators, exercize power over the suppliers of the applications. This, he believes, but does not explicitly argue, would be best achieved by submitting the addressing and naming functions of the Internet to the jurisdiction of a state-based treaty system, which would impose those reductions in national sovereignty necessary to achieve the required degree of international coordination.

Such I result, I argue, would be to the detriment of the interests of their countries' citizens and, of course, those nasty multinationals that provide the applications.

Each side has reasonable interests to defend and advance. But in a fight between telecom operators and their governments, or governments and their telecom operators, on the one hand, and Internet-based applications providers, Hill's proposals assume that all good emanates from a tight collaboration of state and local distribution monopoly, against transnational providers of applications.

I am led to infer that something greater than international money flows is disturbing the tranquility of Mr. Hill’s worldly reflections, and that something deeper is bothering him than improved arrangements for the coordination of IP address assignments and the management of domain names recognized by a common root server.

It seems to me that what most bothers Mr. Hill is that the Internet has broken up the tight controls that states used to be able to exercise over thought, expression, and access to information. I could be wrong. It might be simply a matter of distaste for the United States and its commerce-driven governmental system.

Those of us who lived in the days of tightly-controlled telecommunications and broadcasting structures, such as characterized the 20th century, have welcomed the bracing possibilities of the Internet, which has linked computers, and the human beings empowered by them, more effectively than treaty-based obligations ever could. It is important not to romanticize the Internet, but it is more important to get the big picture right. The tightly controlled signals transport system of the 20th century was shattered by the Internet. It is still possible to achieve police state goals through communications, if that is your country’s desire, but it has become a lot harder.

If Mr. Hill could achieve his desire of taking us back to the ITU world, the carrier-monopoly world, we would experience something like a Counter-Reformation, and the closing of human possibilities from a different direction than unbridled commerce. Personally I do not want to go there, and most of the liberal market societies of this world do not either. Nor do I want unbridled private sector monopolies of distribution or of applications. There is a role for governments in this, and they already have the powers they need to control monopolies and market power.

Disraeli said “power has only one duty – to secure the social welfare of the people”. If that is the criterion by which we judge government by the ITU (or its equivalent) or government by ICANN, then my conclusion is that Mr. Hill’s arguments have failed to engage the issue.

 


[1] http://www.tni.org/briefing/true-stakes-internet-governance

[2] ICANN and internet governance: sorting the debris of ‘self-regulation’, Milton Mueller, 1999, at http://www.icannwatch.org/archive/mueller_icann_and_internet_governance.pdf

[3] The International Telecommunications Union is a treaty organization of the United Nations. http://www.itu.int/en/about/Pages/default.aspx

[4] http://en.wikipedia.org/wiki/OSI_model

[5] http://www.tmdenton.com/images/reports/icais_mod1_ch1.pdf Hyperlinks to chapters of this report are found at the bottom of this page: http://www.tmdenton.com/index.php/publications/reports

[6] Of course, in a more usual use of the word, there is nothing “natural” about the telephone monopoly; it is a techno-legal construct, and as technologies of production have changed, so has its ability to remain a monopoly in communications. The Internet itself is the classic illustration of how technological change wiped out a “natural” monopoly.

[7] At p. 9 of the paper

[8] http://www.crtc.gc.ca/eng/archive/2009/2009-657.htm

[9] At p. 9 of the paper

Chairman's Report 2016 ISCC

 

 

December 15, 2016

Chairman’s Report

Christmas 2016

This report is intended to provide members of the Internet Society Canada Chapter with an update of our policy activities this year. It will be as simple and direct as I can make it, and it is not intended to be a complete overview of everything we do. Our President, Lynne Hamilton, would emphasize other activities, and quite rightly.

Roughly speaking, the work of the Chapter is divided into policy interventions, and programs and events, which provide speaking platforms, fund raising opportunities, and feedback to government initiatives.

Policy Interventions

Our policy interventions are intended to keep the Internet free, as in free speech, and cheap, as in affordable.

As governments slowly start to understand that their treasured monopolies, business models, subsidies, and legislative frameworks have in many cases been rendered ineffective, some of them reach out to correct what they see as deficiencies in the Internet, or to limit people in their choices of where they can go. There is nothing new in this. The State and the Market have been having this fight since society began.

Nevertheless it is my observation that governments on the whole, with some sterling exceptions, have a poor understanding of the Internet and many would destroy its effectiveness in a trice to salvage obsolete business models. We lack no instances of this at either the federal or provincial level in Canada in 2016.

The issues on which the Society has intervened have been:

  • Quebec’s gambling legislation
  • Intervention with the Governor in Council to support the CRTC’s decision on access to wholesale facilities of underlying carriers (CRTC Regulatory Policy 2015-326)
  • Intervention in relation to the CRTC Proceeding on Differential Pricing Plans (Telecom
  • Notice of Consultation CRTC 2016- 192)
  • Review of basic telecommunications services [Telecom Notice of Consultation CRTC 2015-134, February 08, 2016]
  • Intervention in response to Canadian Heritage Consultation on Canadian Content in a Digital World (November 2016).
  • Intervention on Government Consultation on National Security

 

Quebec’s Gambling Legislation

We wrote to the Minister of Finance of Quebec, Carlos Leitao, a letter which described what were then budget proposals to block access by Quebecer to all gambling sites, other than its own Lotto Quebec site, as technically futile and unconstitutional, in that the law exceeded the jurisdiction of the province. Gamblers will use Virtual Private Networks (VPNs) to avoid the restriction. Since then the National Assembly of Quebec has legislated to this effect, and the CWTA (Canadian Wireless Telecommunications Association) has taken the government of Quebec to court over it. The CRTC has twice affirmed its jurisdiction over the matter in no uncertain terms.

The head of the Quebec Chapter of the Internet Society, Louis Houle, and I continue to talk on the issue. However the completeness of the pleadings of the CWTA, especially as they concern the freedom of speech aspects of this legislation, led the Policy Committee to conclude that our Chapter had no need to intervene judicially.

The case has yet to be brought to trial.

 

Access to Wholesale Facilities, Intervention with the Governor in Council of Bell’s Appeal

Bell Canada tried to roll the new Liberal government with the usual claims that it has to make uncounted zillions of dollars lest they be disinclined to invest in fiber networks. Their appeal was premature, in that the CRTC had not then settled what the wholesale prices should be, but it was designed to be within the one-year time limit for appeals to cabinet.

I quote from it:

The essential premise of Bell’s argument is that the relevant form of competition must be between networks. The carrier must absolutely own the whole of its network and not be obliged to share it – on any conceivable terms – with other entities.

Competition of this nature is said to be “facilities-based”. It conjures an image of heroic competition between capital intensive giants slugging it out manfully for market share. To the Internet Society, such a view of competition is predicated on completely pre-Internet ideas. “Facilities-based competition” is a term that predates the explosion of consumer interest in the Internet that followed the development of the world wide web by Tim Berners-Lee in 1989 and the subsequent adoption of web browsers, in the mid-1990s. The term “facilities-based” competition derives from a world in which voice telephony was the only relevant game, and when competition in long distance telephone service was finally introduced in Canada, in 1992, it was thought that different and competing physical networks would provide more effective competition than by merely resale and sharing.

There was, at that period, no public internet, and competition was confined to a couple of services, long distance voice and data telecommunications. Yet the idea persists – or continues to be propagated - that real and effective competition can only be provided by rival silos of end-to-end carriers.

One sees this idea propagated from several sources: the MacDonald-Laurier Institute, the Montreal Economic Institute, the U.S. Republicans, and the telcos, who sponsor this doctrine. It is one of those truly bad ideas that friends of competition consistently engage in. The relevant form of competition is not in the pipes, it is in the services you get from the pipes. At the level of pipes, conduits, wires, and towers, the duplication of facilities will always remain hugely expensive. In an age of optical fiber, with its virtually unlimited bandwidth, duplication of pipes is probably superfluous or impractical in most situations. But at the level of services and applications, the field of competition is virtually unlimited, as we find out every time we open our browsers.

In any case the government turned down the Bell appeal, and the CRTC later ordered a vast (86%) reduction in the price of Bell’s wholesale product.

Why bother to write, you may ask? The goal is to influence the advice given by the Department of Industry’s telecom experts to the Cabinet. Since the vast preponderance of advice will be weighted in favour of carrier-centric views, it is important for the Internet Society to offer a countervailing view. They need to be encouraged in their inclinations to resist the domination of carriers.

 

Review of Basic Telecommunications Services (CRTC proceeding)

In February of 2016 the Society wrote to the CRTC in support of its review of basic services proceeding, telling the Commission that it was asking the right questions and proceeding in the right direction. The Society did not seek to intervene.

Intervention in relation to the CRTC Proceeding on Differential Pricing Plans (Telecom

Notice of Consultation CRTC 2016- 192)

This issue arose in relation to the plans of some carriers to make some applications available for “free” if the consumer used them and not others as their preferred carrier. It is usually referred to as “zero rating”.

We intervened in June 2016. We did not seek to appear at the hearing on this subject which occurred in the autumn of 2016.

The problem, we stated, was self-inflicted. Usage caps are the creation of carriers; they inhibit usage, and are intended to maximize revenue. To get around their own usage caps, carriers devise schemes to incent usage over their own networks. Differential pricing schemes constitute marketing strategies, and we recommend that the regulator develop guidelines as to how it would envisage interpreting the stipulation against unjust and undue discrimination in the Telecommunications Act, particularly as they would apply to dominant vertically integrated carriers.

Intervention in response to Canadian Heritage Consultation on Canadian Content in a Digital World (November 2016).

In November 2016, the Policy Committee of the Society engaged in a vigorous debate about this issue, which concerned the scope of our intervention, and the points to be made within it. Thanks to Len St. Aubin and Philip Palmer, we were able to draft what I think is a well-crafted and substantial response to the Heritage Ministry’s request for comments.

Our intervention says, in part:

ISCC believes that the prescriptive regulatory approach taken to support Canadian content in broadcasting cannot and should not be applied to the Internet. Such regulation imposes heavy costs and inefficient use of resources, which results in:

a.         higher prices for Canadians;

b.         disincentives to innovation; and

c.         incentives to produce content for which there are no audiences in Canada or abroad

The Society took vigorous exception to the notion that the Broadcasting Act can or should be extended to apply to programming on the Internet.

The ISCC is wholly opposed to any “Netflix Tax”, whether by way of a regulatory levy or by way of a tax imposed by Parliament. Either would be detrimental to interests of Canadian Internet users, and could prove negative to the interests of Canadian content creators.

We take no issue with government objectives to support Canadian content. Indeed, we applaud the direction taken by the consultation paper to refocus policy on:

1          promotion rather than protection;

2          global rather than just domestic markets;

3          investing rather than subsidizing;

4          platform agnosticism, rather than platform-specific support; and

5          realizing the potential of Canadian culture as a driver of economic growth in addition to its social and cultural benefits.

Intervention on Government Consultation on National Security

Our submission responded to the federal government’s Green Paper in relation to national security in an information age. The report was drafted by our counsel Chris Copeland on the basis of discussion held at a colloquium hosted by ISCC at CIRA offices.

In relation to the expectation of privacy for basic subscriber information, our points were:

  • Tools of investigation should not come at the expense of the reasonable expectation of privacy of basic subscriber information that was recognized and protected in R v. Spencer. Accordingly, any tools and measures intended to improve timely access to basic subscriber information must be carefully calibrated to prevent potential abuses of such information by law enforcement agencies.
  • Government should consider means to expand the powers and resources of privacy oversight agencies so that they can fulfill the role of overseer and rebuild public trust and confidence. The government should ensure that these agencies are capable of acting proactively rather than reactively and that these agencies must have the legislative authority to impose appropriate consequences that will promote deterrence.

In respect of interception of messages by carriers, we said

  • First, providers of communications services must be compensated for the cost of acquiring and installing the equipment that is necessary to intercept communications and for engaging in interception activities. Second, communications providers must be subject to a strict set of requirements that are intended to ensure that interception capabilities are only utilized to comply with court orders.
  • Substantial statutory damages should be available for a communications provider’s use of interception capabilities in a manner that is not authorized by court order or in accordance with the prescribed guidelines

On data retention, we considered that the Green Paper was biased towards the needs of investigators over carriers.

  • Data retention requirements should stipulate different retention periods for different categories of information, based on the sensitivity of that information. More specifically, retention periods should be reversely proportionate to the sensitivity of a category of information.

On the subject of encryption, the colloquium came to no consensus.

_____________________________________________________________________________

The Internet Society’s submissions to various agencies of government can be found in full at http://internetsociety.ca/2016/12/14/2016-annual-report-from-the-chair/

Once again I call attention to the fact that this report deals only with our regulatory and policy interventions. Special events, conferences, and colloquia constitute another important aspect of the Society’s work. I trust we will have a further report on them in a near future.

Special thanks to our President, Lynne Hamilton, our Treasurer, Nancy Carter, and our Secretary-Counsel, Chris Copeland, for keeping the lights on, the bills paid and the committees organized and their discussions and decisions recorded.

 

 

Timothy Denton

Chairman

Internet Society, Canada Chapter

Next Generation 9-1-1: The Neglected Elephant

This is a short presentation to the November 2014 ISP Summit in Toronto on the state of development of a new NG 9-1-1 system.

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