Dialing for digital dollars: inside the Cancon sausage factory

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A little sympathy for Mélanie Joly, please.

melanie-jolyImagine if your job was to save the purveyors of Canadian content from the ravishes of American cultural imperialists, cord-cutters, cord-shavers, cord-nevers, millennials in general, digerati, incumbent ISPs, Reed Hastings, VPN developers, Jeff Bezos, Chicken Little, Hulu, cloud computing vendors, Henny Penny and Reed Hastings. It’s harder than it looks.

Contrary to popular belief, Ms Joly is doing exactly what the Minister of Canadian Heritage should be doing these days: looking for money to put into the pockets of Canada’s network content providers so they can make bigger and better Webisodes for the digital age. Yet her ideas for accomplishing this daunting task have drawn vociferous criticism. Many criticisms have focused on issues outside the Minister’s mandate and are based on little appreciation of how things actually work in her department.

So let’s head on over to the sausage factory where the sausage mandarins have been cooking up our Cancon policy for the last half-century.

We’ll start with Minister Joly’s least popular trial balloon: slapping an “Internet tax” on everyone’s ISP bill. My friends at OpenMedia have been pointing out with alarm that such a tax would only serve to raise the price of Internet access, when Canadians already pay high prices for mediocre service (you can sign their petition here).

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OpenMedia: Joly’s tax would make us as bad as Hungary

Could there be anything worse than this tax “on the Internet”? Yes! A tax on Netflix, an idea that just won’t die, thanks to Joly’s alleged plan to bring the streaming giant “into the system” – Ottawa code for we’re gonna tax the daylights outta Netflix.  Continue reading

Netflix? it’s not the content, stupid, it’s the connectivity (2)

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Fresh evidence from Akamai about Canada’s lousy broadband speeds

Time now for some empirical evidence, featuring Akamai’s recently published State of the Internet report for Q2 of 2014. 

Akamai’s Intelligent Platform is a cloud computing technology that operates in some 90 countries around the world. Because of the scale and sophistication of its operations, it collects and analyzes huge amounts of real-time (not advertised) data about broadband speeds and related variables (based on roughly two trillion requests for Web content every day). Akamai includes in its analysis every country from which it receives requests for content from more than 25,000 unique IP addresses. Currently that’s 139 countries. Continue reading

Sept 29: CRTC hearing on wholesale mobile wireless services

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Canada is a world leader for high mobile prices, low handset penetration and astronomical revenue per user. These are the results that typify a market in which incumbents aren’t disciplined by either competition or regulation.

Price-gouging and prejudicial contract terms are an established feature of both retail and wholesale markets – one important reason among many for all the failures among Canada’s new entrants. Some of us believe strongly we will never enjoy a fair and competitive retail market unless and until major reforms are made to the way the wholesale market has been allowed to develop.

The CRTC announced in February it was launching a proceeding to look into a number of contentious issues, in particular “to determine whether the wholesale mobile wireless services market is sufficiently competitive, both now and in the future” (Notice of hearing, Telecom Notice of Consultation CRTC 2014-76, para 11). The public hearing phase begins on September 29. Ben Klass and I are intervenors in this proceeding, and the staff liked our filings so much they’ve invited us to appear at the hearing. Continue reading

Digital Canada 150: why the Tory plan is risky, not just foolish

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April 17 and a couple of updates

1 – Data caps. Not quite a breaking news update (on my caps comments at the end ofpost-dc150-caps-2 this post), since this story appeared in Ars Technica on March 13. “Time Warner Cable has been offering customers $5 monthly discounts in exchange for giving up unlimited data for the last couple of years, but almost no one has taken the company up on its offer.” In fact, only a few thousand of TWC’s 11.5 million customers have done so.

Here’s the deal: any TWC sub who wants to save the $5 a month can do so by cutting their cap from unlimited to… 30 GB! Jon Brodkin does the math and figures that three months of “excessive” Internet use and that sub loses a year’s worth of savings. The USA’s second most-despised ISP (after Comcast) has a story for that. CEO Rob Marcus claims his customers must value unlimited – duhdoy. Continue reading

European Parliament votes 534 to 25 for network neutrality

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Here in Canada, our idea of a free and open Internet is being held hostage by the CRTC. Its TV Talks consultation makes it very clear that a non-discriminatory Internet is going to continue to play backseat to our quaint, moribund notion of TV culture – which Ottawa thinks is still holding the country together from sea to shining sea.

In a far more vociferous debate on net neutrality, the US open Internet community has been pitted against the outré posturings of many Republicans, who want their government to stay in the business of regulating the Internet through ICANN, but condemn the FCC’s latest attempt to revive its Open Internet Order as a form of censorship, an innovation killer and a solution in search of a problem. The Republicans have ingeniously, and disingenuously, co-opted the the whole notion of a free and open Internet in their current lingo, while winning headline battles by turning every attempt to protect innovation, free speech and access to bandwidth as part of the unspeakable idea of… gasp, regulating the Internet!

PilardelCastilloVera-1Meanwhile, earlier today, the European Parliament voted by an overwhelming majority to pass the report tabled by member Pilar del Castillo Vera of Spain that outlines a strong, unambiguous framework for protecting EU citizens from unwarranted discrimination on the Internet. The European support for net neutrality, which may still wait months for endorsement by member nations, is dripping with irony. (The release page is here, excerpt below.) Continue reading

The CRTC’s annual report is out: the good, the bad, the weird (3)

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Bricks and mortar with window, Spitalfields, London E1, August 2013

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How can the CRTC do a better job?

As I argued in the previous two posts, the CMR doesn’t have a life of its own; it reflects the CRTC’s larger priorities. The big one here is research and evidence-based policymaking. A close second is the Commission’s still awkward fashion of trying to reach out to the little people – i.e. anybody besides the inner circle. Here are my suggestions for how it can do what it apparently wants to do, only better:

1 – Stop wasting money on online consultations. Redeploy it for real consumer research. Online consultations aren’t just a waste of money; they can also be highly misleading. One reason for their being unrepresentative is that online “surveys” of the public can’t reach Canadians who aren’t online to begin with. Unfortunately, the Commission isn’t going to find any new money for research, not as long as it sticks to the current Expenditure Profile. As shown in the graph below, the Commission’s spending is pretty much flat from 2009 to 2016, especially if these figures were converted to constant dollars…

crtc-budget-2009-16Source: CRTC Departmental Spending Trend

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The CRTC’s annual report is out: the good, the bad, the weird (2)

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London, East End council flat, August 2013

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Last time, I described some of the ways in which the CMR has fallen short. I added that the current incarnation of this document marks a sharp departure by reflecting a greater concern for end-user behaviors and consumer welfare. I’ve been looking at the CMR less as a source of information about particular trends, and more as a window through which to gauge how the Commission is allocating priorities (the CMR page is here).

I grouped the details into four areas, and covered 1 and 2 in the previous post:

  • 1- The emphasis on industry vs consumer welfare. That emphasis has changed quite dramatically in the 2013 edition, which stems from the pro-consumer tilt the Commission has taken under the current Chair.
  • 2 – The reluctance to report bad news. This entrenched timidity is still holding back critical discussion. That’s one great advantage the FCC’s structure has: open and sometimes quite vocifeous partisanship, since appointees must include a balance of Democrats and Republicans.

So how about the other two?

The Wireless Code vs the CWTA’s bafflegab: is there a winner?

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Bernard Lord, CEO of the Canadian Wireless Telecommunications Association

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“Canadians would be willing to pay more for cellular services, study says.”

If you read that headline in the Globe and Mail on Monday, did you jump to the same conclusion I did? That the CWTA commissioned a consumer survey in which they asked about price points for wireless services? And found somehow that Canadians would pay more… than they’re already paying?

It turns out you had a good reason for your cognitive dissonance. No Canadians actually said to an interviewer, yes, I’d like to pay more. That’s because there was no consumer survey, and any suggested personal agency or willingness to pay was a lobbyist’s plant, based on a piece of economic theory about consumer surplus that bears no relation whatsoever to how any person I know feels about their cellphone bill. What the Globe meant, but didn’t know so, is depicted in the graphic below. The difference in the price that consumers would be willing to pay, if they had to, and the amount they pay now, is the consumer surplus – aka I wish I could pay Bell Mobility even more.

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Continue reading