Misguided assumptions behind the CRTC’s broadband target (1)

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A colleague of mine emailed me recently. He was responding to my April post on Rescuing Consumers from the Scourge of Netflix. He was amused. Then came this sobering thought: “Maybe things will change. Maybe. Keep pushing that rock up the hill.”

Thanks a bunch. Lately the soliloquies posted here have been sounding like a broken record and, yes, playing Sisyphus is a lot less fun than it looks. Why the annoying repetition? The problem has something to do with certain misguided policy assumptions that simply will not die – like those behind the CRTC’s May 3 decision, Telecom Regulatory Policy CRTC 2011-291. As the press release says: “CRTC sets speed target for broadband Internet and maintains obligation to provide basic home telephone service.”

Here it is, one more time: having access to broadband and being a broadband adopter are from different planets (as I explained in 2 previous posts, here and here)

Reactions to the broadband target dwelt mainly on a) why aren’t we doing more for our poor compatriots in rural Canada; b) what particular speeds to target; and c) who’s gonna pay for any buildout. I was disappointed PIAC’s Lawford stayed mostly with the rural ethos, leaving too much room for the interpretation that broadband is all hunky-dory in urban centres:

“If there is no rural broadband now, there will not be any more thanks to this decision,” PIAC counsel John Lawford said in a press release (Wire Report, May 6).

I was also surprised at how both Lawford and Geist waxed optimistic about the likelihood that the Conservative government will treat these aspirational targets as a springboard not merely for better broadband, but also for a new and improved digital strategy. Lawford allowed warily that the decision “could nudge the Canadian government into action” (Wire Report, May 13). Geist flipped this idea around, making the perfectly sound argument that getting Canada back on the broadband map, and back up the OECD rankings, is a matter of over-arching government policy, not mere telco regulation:

“… I wonder why Canadians should expect the CRTC to lead on broadband targets and funding. Universal access to globally competitive broadband (in terms of speed, pricing, and consumer choice) is perhaps the most important digital policy issue Canada faces and it should not be viewed through a narrow telecom regulatory lens.

“Rather, it is a government policy issue, one that requires a serious commitment by elected officials. With a new Conservative majority government, the era of excuses (the Liberals did nothing, minority governments make this issue too difficult) are over. Given the fixed date for elections, there are roughly 1,500 days left in the Conservative mandate. July 2015 provides the real target date for addressing the competitive and access concerns associated with Canadian broadband” (blog post here).

Just a few meters up this pole awaits the door to your Internet future!

Fuggedaboudit

This framing gets the logic all right and the politics dead wrong. In their 2010 digital strategy, their rural broadband scheme, their November update to the strategy and in every other pronouncement, the Tories have shown they have absolutely no interest in any form of user-centric broadband plan. And with a majority government, they have even more “excuses” than when they operated in the minority: i.e. excuses to avoid watering down the business and ICT orientation of their strategy for a digital economy. A strategy for the digital economy has a whole different audience and purpose than a broadband strategy.

But that’s a matter of politics and politicians can change their minds if they see love at the end of the tunnel – as in the famous Clement tweets about the January 25 UBB decision, which suddenly became so unpopular that Clement and his boss became overnight populists and defenders of consumer welfare. Which is a lot more than you can say for the fatal assumption about broadband success that crept into the CRTC’s target-setting exercise. What’s it designed to accomplish?…

“In the Commission’s view, the establishment of a target speed for broadband Internet access available universally to all Canadians would be in the public interest” (para 72).

The target then is to make broadband at 5-meg down/1-meg up “available” to all Canadians; it is not to ensure all Canadians have broadband in their home – let alone ensure all Canadians have the tools, skills and motivation to become onliners themselves and start discovering what benefits will accrue to them as actual users. What’s wrong with this picture? Just back up a few pages, to para 18 of the decision. There the Commission yanks the rug out from under its own scheme when it provides the following data about broadband availability vs broadband takeup:

When the basic service objective was established in 1999, dial-up service was the dominant form of residential Internet access. Since then, technology has evolved considerably, to the point where a majority of Internet users in Canada use broadband Internet access connections. Today, broadband Internet services (excluding satellite technologies) are available to 95 percent of Canadian households, and in the areas where they are available, 65 percent of households have adopted them.

Adoption, adoption, adoption

Recognize the math? One-third of those Canadians who have so-called “access” to a broadband Internet connection – not to be confused with here-and-now access to the Internet – have chosen not to lease such a connection. The reasons for this huge shortfall are well-known and generally divided into two categories (in both the US and Canada): affordability and digital literacy. Respondents say, in so many words, I can’t afford broadband, or I don’t have the skills, awareness or interest to adopt it. Speaking to the Wire Report (May 13), Telus’s Mike Hennessy agreed there’s more to the broadband problem than stringing more cable:

“The issues that I think many people have identified, and rightly so, are due to reasons of income and digital literacy in particular. Even with 100 per cent coverage, there are still going to be challenges for 100 per cent adoption.”

I’d disagree with the view that “many people” have identified these issues, but Hennessy at least reminds us that our broadband future is about one thing above all: adoption, adoption, adoption. In any case, the big surprise here isn’t the 30% shortfall or the reasons survey respondents give for not adopting. It’s that the Commission would present these numbers without any comment or analysis, then proceed happily on its way, treating the further extension of broadband infrastructure, not adoption, as the paramount public policy goal. In fact, apart from a few general passages about the goals of the Telecommunications Act, the decision does not have a single word to say about either broadband affordability or digital literacy.

(will continue…)

D.E.