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



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.

TimeWarnerCable_Logo_1But that’s only half the battle. If TWC merges with Comcast, Marcus’s attachment to unlimited will get swept away by the new boss, who never met a data cap he didn’t like. At the end of the day, the unlimited offer is on very shaky ground as an operating principle, since even Marcus is still mouthing the usual ISP party line: “I think that the concept of ‘use more pay more, use less pay less,’ is an important principle to establish.” In other words, we’re going to keep pretending that congestion is caused by hogs, not by aggregate traffic buildups. In Canada, meanwhile, we know for sure that Bell and Rogers would never have offered unlimited in any form were it not for the competitive embarrassment from TekSavvy and its combo of 300-gig and unlimited packages.


2 – Mean download speeds. In this post I made particular fun of the Moore-Harper scheme to give Canadians a 2017 broadband target of… 5 Mbps! All kinds of data, including data from the real world in our own country, shows the Tories have no clue what they’re doing on the digital file. Another nail got hammered into that particular coffin a couple of days ago, when Ofcom announced that measured (actual) mean download speed in the UK has now hit 17.8 Mbps – whereas the UK mean had already hit our Tory target four years ago (May 2010). Two lessons emerge from Ofcom’s latest research.


From Ofcom’s broadband research page (April 15, 2014)

The first is, of course, that the Tories have been overtaken by events in broadband development. As I argued below, they aren’t just struggling to keep up; they’ve already lost, for the simple reason they don’t care enough to pay anything other than lip service to the benefits of digital.

The second lesson is this: Ofcom actually does detailed empirical research and makes the results widely and readily available. And they use the data they collect to make policy. It’s time for the CRTC to start paying attention to how a consumer-friendly regulator conducts business. Here’s a hint from the page on the broadband results, in the form of the seven subject headings used:

  • Average UK broadband speed revealed
  • Differences across the country
  • Fastest download and upload speeds over a 24 hour period
  • Average download speeds by ISP package
  • Measuring speeds at peak times
  • Advertising and promoting broadband speeds
  • Ofcom broadband speeds research

There’s a nice crossover here between this update and the caps above. If the CRTC began making all these measurements, especially speeds at peak times, pretty soon we’d begin to see that caps have no role in traffic management.

In a perfect object lesson for the CRTC (which is currently trying to fix its kludge of a Web site), here’s how Ofcom describes their work under the last of these subject headings – and in particular, how their work is puposefully designed to help consumers make purchase decisions:

This is Ofcom’s tenth report into fixed-line residential broadband speeds using data collected by research partner SamKnows. The research examined packages provided by the seven largest ISPs by subscriber numbers. There were 735 million separate test results recorded in 2,391 homes during November 2013. The report is intended to help consumers understand the significant variations in the performance of ISP packages and, when considered alongside other factors such as price, to make more informed purchasing decisions.


Four years and they give us 26 lousy pages?

Your first clue as to the astounding incompetence of the DC150 plan is its length.

(The home page gives you the option of launching a so-called “interactive” version, Ottawa’s gloss for a launch button and virtual page-turning – hurray for Javascript!)

It’s hard to understand how these guys thought they could get away with releasing what is essentially a marketing brochure and pass it off as a national strategy. Then there’s the timing issue.


Four years ago Canadians were treated to a consultation on Improving Canada’s Digital Advantage (pdf). Until last week there hadn’t been any action on whatever that consultation turned up. You’d think after all that time IC officials would have cobbled together more things for us to read. Worse still, DC150 makes not a single allusion to the 2010 exercise, suggesting it was just window-dressing and a waste of tax dollars.

Now let’s look at how those 26 pages get used.

A certain amount of historical analysis is a necessary part of developing policy for the future. For example, looking back at the history of telephone adoption provides useful clues as to how broadband may distribute unevenly across the digital divides created by income, education and other demographic factors. But don’t go looking for any such logic in DC150. The authors are much less interested in the hard-won lessons of history than they are in looking to confirm that a) Canada has been doing just fine in the digital era; and b) we have the Tories to thank for that.

The net result is that this brochure is even lighter than the nominal 26 pages after we account for the self-congratulatory bumpf. No less than nine pages are devoted to either What We’ve Done or Success Stories (pp. 9, 10, 13, 16, 17, 20, 23 and 24, along with half of pages 11 and 19). Using this math, 26 pages of forward planning nets out at a remarkably terse 17 pages.


FCC Broadband Plan, one of many national plans to shame the Tory effort

Let’s try out an invidious comparison with the nearest American equivalent to DC150 – the FCC’s Connecting America: National Broadband Plan, issued in 2010 while our government was busy consulting (the FCC consulted too, but on a much wider scale, in a far more organized fashion and with a view to absorbing all the evidence presented to them). While there are important differences between the Tory approach and the FCC’s, how to develop the broadband Internet is still the most critical part of any national digital strategy.

The FCC plan is a useful document to consult if you want to see what a serious policymaking effort looks like – starting with the simple contrast in length. The US plan runs 376 pages – over 14 times longer than DC150. As Michael Geist points out in a post this week, DC150 pales beside the efforts made in most other OECD countries, especially on the crucial issue of broadband development.

Michael’s comparative exercise shows – as if we needed to be told – that a downlink target of 5 meg by 2017 is laughable next to the goals set by our trading partners. But wait, there’s more. First, the brochure-makers apparently forgot to check in with their regulator (the CRTC) to find out what they’d been saying about broadband targets. Surprisingly, the CRTC set the same downlink target – except oops, they did so three years ago – for 2015, not 2017.

It gets worse. The data analysis I helped on for Dwayne Winseck’s February profile of international broadband turns up this even more embarrassing fact. According to the FCC data shown in Table 2 below, the mean actual speed for Canadian wireline broadband was 10.4 Mbps – and that’s based on data collected in 2011! See for yourself…

wireline-bb-oecd-fcc-winseckWhy didn’t IC bother to check data like this from the Winseck report? 

I’d like to underscore another interesting factor here. You’ll notice there are three different rankings: one for actual speeds (from the FCC, 2011), one for advertised speeds (from the OECD, 2012) and then a composite. In the ranking of the 34 OECD member countries, Canada comes in at a composite ranking of 10/34. But notice what that was derived from: on the actuals, we stood at 19/34, whereas on advertised speeds, we did much better (7/34). Why is that? Duh, because our incumbents are not constrained by regulation or compunction from using “up to” speeds – and as a result, though they’re not directly comparable, our advertised figure (52 meg) is five times higher than our actual means (10.4 meg).

(If you care to know what “actual” signifies here, this is the relevant footnote: “The FCC findings are based on the datasets published regularly in the Ookla Net Index, which cover the 34 OECD countries, as well as four additional countries: Belgium, Hong Kong, Lithuania and Singapore. The FCC weights and stratifies the city-level data collected by Ookla  to improve their reliability.”)


For the Tories, wires – not people – are the policy goal

The FCC plan is divided into three major sections: Innovation and Investment, Inclusion and National Purposes. The section on Inclusion, which is particularly important as a sign of seriousness of purpose, is divided into two chapters: Availability (chapter 8), and Adoption and Utilization (chapter 9). The FCC shows here it understands that “build it and they will come” will never work for advanced platforms like the broadband Internet, no matter how much attention government devotes to making it “available”…

Even if broadband reaches saturation in coming years, the aggregate adoption number may mask troubling differences along socioeconomic and racial and ethnic lines (p.167).

In Ottawa, by contrast, our leaders keep patting themselves on the back because they’ll be making broadband available to 98% of Canada’s population at some point. It’s frustrating to have to listen to this political mumbo-jumbo, when some 20% of Canadian adults can’t or won’t go online. In plain, non-Tory English, no service is “available” to you if you can’t afford it, are afraid to try it or feel it has no place in your life.

prada-window-shoesIn our neighborhood, $1200 men’s shoes are 100% accessible!

To the current government, disenfranchised Canadians don’t exist in their conception of social policy. Instead, we have to live with the meme that will not die: the plight of rural and remote Canadians, who suffer from too much geography and deserve all the available funding to get them connected. The Americans get what’s important in all this, namely that the benefits of the Internet come with adoption and use – not stringing more wires or building more towers.

As we dig deeper into Ottawa’s assumptions, we need to keep something else in mind that throws light on the policy goals of access vs those of adoption and use. Under its previous chair, the CRTC implemented an alleged network neutrality framework (the Internet traffic management practices, ITMPs) whose original rationale was to discourage Internet use. That foolish view of the world, borne of Bell’s disinformation campaign about traffic congestion in 2010, lives on bigger and better than ever in the form of data caps.

By way of reminder, the CRTC was convinced in 2010 that the bandwidth hogs demonized by Bell had to be brought under control – and the only way to do that was to punish them for “excessive” use of network resources. Too bad the joke is now on everyone who subscribes to an incumbent ISP service, which all feature financial penalties for using the Internet “too much.”

Canada is one of the few countries in the OECD that tolerates caps, since they have no proven value in traffic management, but only in raising ARPU. Look at the OECD figure below, in which Canada ranks fourth in bitcap prevalence and the great majority of countries have no bitcaps at all (published in the OECD Communications Outlook, 2013).


In conclusion, even a cursory glance at the Tory plan reveals major policy failings:

  1.  DC150 is premised on the deeply flawed assumption that the federal government’s responsibilities begin and end with provisioning connectivity, with no regard for policies to encourage adoption or use, meaning millions of Canadians will remain on the wrong side of the digital divide.
  2. DC150 says “we are now ready to take our place as the most technologically advanced nation on the planet,” yet studiously avoids making any international comparisons that would make Canada look like the digital laggard it really is.
  3. DC150 sets a broadband target for 2017 – 5 Mbps – that is not only far behind the rest of the developed world and out of keeping with what our national regulator devised in 2011, but also ignores what existing research already shows about our broadband infrastructure – another symptom of the Tories’ reluctance to conduct research and work with factual information.
  4. DC150 lacks the courage to acknowledge that data caps cause serious harm to competition and consumer welfare, and that caps are in addition a violation of the current government’s own regulatory philosophy of “market forces” trumping regulation, since in competitive markets, caps get pushed out.

DC150 is more than just a non-starter. It’s a dangerous piece of work that will mislead Canadians as to the resources we need as citizens in the digital era. We have a long fight ahead to get progressive policy reform back on the federal agenda.

In future posts, I’ll tackle television’s untoward influence on DC150, and the many other ways in which this government doesn’t get the Internet…