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If it moves, regulate it | Bruce McDougall

Wednesday, March 11, 2020 @ 11:44 AM | By Bruce McDougall


Bruce McDougall %>
Bruce McDougall
To the sound of one hand clapping, a panel released its recommendations earlier this year on “modernizing legislation governing Canada's communications sector.” The 97 recommendations from the Broadcasting and Telecommunications Legislative Review (BTLR) Panel, released after almost two years of hearings, research and study, address a wide range of concerns, from technological advances of Canada’s major telecommunications companies to the practices of the Canadian Broadcasting Corporation to the influence on Internet safety of a guy in his undershirt sitting in his bedroom at 3 a.m. disseminating bootlegged Sylvia Saint videos from his laptop.

Of the panel’s seven members, six are lawyers, three have worked for the Canadian Radio-television and Telecommunications Commission (CRTC) and none of them has any private sector experience with a telecommunications company. Not surprisingly, many of the recommendations would expand the mandate and authority of the CRTC.

As every Canadian doesn’t know, the CRTC “ensures that Canadians have access to a world-class communication system that promotes innovation and enriches their lives.” In pursuit of this lofty mandate, the CRTC is currently embroiled in discussions about paperless billing, with particular focus on people who subscribe to essential online services but who don’t know how to pay for them without a stamp.

For this and other critical activities, the organization employs more than 500 people, with a yearly budget of almost $75 million, about $150,000 per employee.

Canada’s major telecommunications companies employ an equal number of bureaucratically minded individuals whose sole purpose is to address issues related to the CRTC. Led by their CEO, representatives of these companies descend every year on Ottawa to justify their policies and procedures at CRTC headquarters across the river in Hull, Que. People who attend these affairs pay special attention to the cost to consumers of telecom services. The BTLR panel’s recommendations would keep these individuals even busier and possibly force the telecoms to hire even more bureaucratically minded individuals.

Under one recommendation, they would gather more information than ever about their “network management practices and their impacts.” They would also participate in “a national digital literacy strategy to empower users of communications and digital services to make informed choices and conduct their online activities safely.” They would spend even more time in Ottawa, reporting to the CRTC on this pressing issue under its expanded mandate “to examine and report on digital and media literacy.”

While this would ensure that the CRTC’s 500 bureaucrats would have jobs for life, it’s debatable whether Canadian consumers of mobile and online services would gain any benefit. According to a recent study by the Economist Intelligence Unit, Canadian Internet users are already digitally literate, whether they know it or not. Apart from a few monosyllabic unibrows who can’t figure out how to pay their bills, most Canadian Internet users apply their digital literacy to process online information with the same healthy skepticism as everyone else in the world.

According to the EIU, nearly half of them distrust information put online by governments, two-thirds distrust information posted on non-governmental websites and apps, and almost 75 per cent regard information posted by individuals on social media, including Basement Man in his underpants, with a healthy measure of skepticism.

The BTLR panel addresses the disadvantages of Canada’s northern and Indigenous communities, who have no access to a broadband Internet service that meets the CRTC’s universal service objective. This would explain why more people in the North describe themselves as truck drivers, school teachers and nurses than online media analysts or digital marketing professionals.

But instead of giving the task of negotiating Internet services with Indigenous groups to the CRTC, whose mandate, after all, is to “ensure that Canadians have access to a world-class communication system that promotes innovation and enriches their lives,” the panel shuffles responsibility for this mess onto the federal government, whose mandate is to make it up as it goes along.

None of the BTLR panel’s 97 recommendations offers much reassurance to Canadians about the prospects for their digital future. Overseen by the CRTC, Canada’s telecommunications companies will continue to provide electronic pathways in the same way that construction companies provide roads, and they will continue to justify the prices they charge to consumers the way construction companies justify the cost of a road by analyzing the price of asphalt.

Although companies like Rogers, Telus and Bell do an incredibly bad job of explaining their costs to the public, they have legitimate arguments to support their billing practices. By the end of 2020, for example, the global cost of 5G infrastructure investment will reach US$2.7 trillion, according to investment dealers who specialize in the area. In the U.S., telecom operators will invest as much as US$275 billion nationwide over seven years, according to Accenture Strategy. This goes some way toward justifying the average Canadian bill of $220 a month for communications services.

And although I have neither the time nor the skill to offer a conclusive opinion on private versus public ownership of our communications networks, I suspect that Canadians are fortunate that these three companies operate in a highly competitive and entrepreneurial marketplace, even if it’s partially protected by our government.

Canadians may not enjoy the rewards of this marketplace much longer. As quangos like the BTLR panel churn out recommendations for further regulation and monitoring of our digital communications providers, big-brained tech gurus like Don Tapscott bemoan the performance of Canadian entrepreneurs in creating more billion-dollar tech companies that can compete in a global digital world. But who can create a billion-dollar tech company, the way Ted Rogers did in the last century, if she has to devote half her company’s resources to justifying its existence before bureaucrats who have never set foot in the private sector and think that they can legislate inspiration?

As the EIU says, “Governments that are bold enough to think beyond legacy telecommunications regulations can address specific challenges facing their countries by unleashing innovative new business models and technologies that presently lack regulatory certainty or permission. New business models can, in turn, generate new waves of investment, including from non-traditional players.”

Raise your hand if you think these new business models will emerge from under the stifling bureaucratic seat cushion under which our communications industry operates in Canada.

Bruce McDougall (Brucermedia.com) has written for The Globe and Mail, Maclean’s and other Canadian news magazines. He is the author of The Last Hockey Game and Every Minute Is a Suicide. A graduate of Harvard College, he attended the University of Toronto Law School.

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