Keystone Canada: Federal Court proves Ottawa isn’t Cairo – yet

Inmates in charge of asylum

Today I’m turning the tables on Tim Wilson, editor and publisher of Telemanagement. For the last several months, Tim has been posting “Comments” from me in the magazine, mostly on policy and regulatory affairs.

Tim sent me a link to the piece below, which he’s written in a non-journalistic style – pretty much a rant in fact, so it’s found a good home. Btw, the pic of beleaguered Minister Clement (after the jump) is not photoshopped. He was apparently looking through a tube at the time, an allusion to jokes made at the expense of the late Republican Sen. Ted Stevens, jokes that went on to become Internet memes. Tim dropped in the photo to suggest parallels between the senator and the minister – and the parallels are no joke.

Stevens chaired the Senate Commerce Committee during the 109th Congress. He was in title at least the most senior U.S. lawmaker responsible for Internet policy. In June 2006, Stevens got embroiled in a raucus debate about including language in a bill to protect Internet neutrality. Stevens was a hostile bumbler who reveals in this speech (the original ran 11 minutes) that his views are based on profound ignorance. And, like right-wingers in general when confronting disruptive technologies, he was capable of astounding feats of double-talk and false populism.

While pretending to be the consumer’s advocate, Stevens saw the Internet much like AT&T’s then CEO Ed Whitacre, who said famously a few months earlier: “Why should they [companies like Google] be allowed to use my pipes?” Stevens didn’t want to let “big companies” dump all their streaming stuff on the Net and make it hard for regular folk like himself to send email. In other words, he wanted a two-tier arrangement, with big Web publishers paying for the privilege of clogging up the telcos’ pipes. Sound familiar? Pay for prioritization. Stevens would be right at home in the current debate on bandwidth gobblers like… Netflix.

Guest post by Tim Wilson

The Telecommunications Act, as law, will continue to be enforced by the Canadian Radio-television and Telecommunications Commission (CRTC). Unless and until the legislation is changed, Industry Minister Clement can Twitter his thumbs blue – policy in Canada cannot be made by political fiat. The issue is that the CRTC is ruling on laws that the Conservative government doesn’t agree with, yet doesn’t have the guts to change.

clement, internet, ted stevens, tubes

Not a big truck but a series of tubes

The most recent example came when a Federal Court judge pulled the rug out from under the Conservative government’s decision to overrule the CRTC after the regulatory body had denied Globalive the right to launch its Wind wireless services in Canada.

In the fall of 2009 the CRTC ruled that Globalive had failed to meet Canadian ownership and control requirements in the telecom sector because its debt financing came primarily from Egyptian telecom giant Orascom. That ruling was in turn overruled by cabinet, paving the way for the launch of the start-up provider.

It was actually Public Mobile, another new wireless entrant, that requested the judicial review of the government’s decision, arguing that the government didn’t have the right to intervene and reverse the CRTC decision in the Globalive case.

In finding that Public Mobile’s application for judicial review has merit, the Federal Court is, in effect, making the case for the need for more clarity in Canada. Industry Minister Tony Clement said via Twitter that his government is studying the Federal Court ruling and “examining our options.”

“Our (government) stands with consumers who want more competition,” wrote Clement, confirming that politics as usual comes in the form of populist grandstanding, which is cheaper – and delivers to greater short-term effect – than real, permanent, and informed policy changes.

The failure is structural

The problem is that the framework for enforcing Canadian policy is antiquated and out of step with both business and consumers. The CRTC has a hard time keeping up with changing technological trends, and is stuck on beliefs that are either plain wrong or out of date: equating bandwidth with processing, for example, or incorrectly thinking that bandwidth can be analogous to, and therefore priced like, a commodified, usage-based utility.

Or failing to understand that the consequence of providers now being in the content game is that there is a major conflict of interest when it comes to involving yourself in how Netflix or even YouTube get priced off your network. Imagine if Loblaw felt it could dictate toll road pricing to Sobeys. No, you can’t. That’s how stupid this is.

We need open markets, and open access. The shift away from the old economy, where protected corporations were rewarded with favourable pricing due to their investments, has proven to be a failure. The Telecommunications Act needs to be opened up, allowing for more foreign competition and offering fair wholesale pricing to third parties.

The recent battle between the federal government and the CRTC over usage-based billing (UBB) was yet another sideshow, revealing how Canada stumbles from one ill-conceived vision to another. On January 25 the CRTC ruled that upstream providers could have the same billing relationship with their wholesale internet service providers (ISPs) as with their direct customers, but would have to prove a 15% discount to smaller ISPs. This effectively killed the unlimited download option.

There was a storm of protest among consumers and businesses – even among government departments that rely on the internet. The Harper government caved, and brought CRTC chair Konrad von Finckenstein before a committee to explain himself. This ridiculous charade was not worthy of our democracy. Konrad von Finckenstein is a well regarded judge. If you don’t like the law, then change it. Don’t blame the messenger.

No doubt Prime Minister Harper would like to get rid of the chair, and opt for a yes-man who would do his bidding, effectively overruling the regulatory process, nullifying the Telecommunications Act, and enforcing policy on an ad hoc basis to serve his ever-fluctuating political requirements. Good morning Cairo!
Instead, how about having a healthy debate, buttressed by an election, and then a law that reflects the needs and interests of all Canadians? At that point, the CRTC would no longer be bandied about as a scapegoat, Canadians would know where they stood, and politicians could occupy themselves with more pressing matters than their Twitter accounts.

T.W.

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PS: If you can handle it, the MP3 file with Stevens’ whole speech is here.