Facing budget constraints, Tories can pursue regulatory reform, say experts

Strapped for the necessary revenues to help develop a national digital strategy, the Conservative government should pursue less-costly regulatory reforms, experts said at a roundtable Thursday. The Liberal Party hosted the roundtable on Parliament Hill to discuss Canada’s digital economy, where panelists agreed that Canada needs a national strategy to succeed in the global digital economy. Experts said Canada must move to expand broadband access—but without the revenues to do so, could look to regulatory reform. “Our national digital strategy is going to be built on the quality of our broadband networks and that quality is going to require billions of dollars of investment,” said Telus’ senior vice president for regulatory affairs, Michael Hennessy. “With the government having a $50 billion deficit, it can’t afford to provide the stimulus money that we are going to need to build these networks. However it can prevent bad regulation.” The discussion involved how to modernize the CRTC. “Part of our problem is that we have a broken regulatory system,” said Tom Copeland, chair of the Canadian Association of Internet Providers (CAIP). “In the telecommunications industry, we have a regulator that needs to go to the federal court to determine if a company that facilitates the bits and bytes across the Internet is actually a broadcaster if those bits and bytes happen to form a song or a video.” Panelists also discussed the possible effects of opening up the Canadian telecommunications market to foreign ownership. “Our foreign investment restrictions are a barrier to entry, innovation and ambition,” MTS Allstream chief corporate officer Chris Peirce said. “You don’t need to own the highway in order to regulate the speed. Regulating Canadian content is a different thing than liberalizing foreign investment.” Copeland argued, however, that liberalizing the rules could lead foreign investors to support the telecommunications incumbents, making the big players bigger, and discouraging competition. Hennessy said another area for regulatory reform us to create a balanced copyright regime that respects intellectual propriety but gives consumers more freedom. Industry Minister Tony Clement said in January that one of his top priorities for the upcoming session is to introduce a copyright reform bill. Hennessy added that the government could use wireless spectrum auctions and the revenues they produce to fund digital literacy and digital access programs. Inovation can be encouraged with government incentives, Hennessy added. But he suggested that new fees on broadcasters, and possibly the Internet and the wireless sector, would be “bad news, particularly when we are coming out of a recession.” “You do want a strategy thinking about having a leading infrastructure that will provide the capabilities that you need for both social and economic purposes,” said Bernard Courtois, president and CEO of the Information Technology Association of Canada (ITAC). “One easy thing is to not de-incentivize it, not to tap money out of the system and not put it back in.” Panelists also spoke of the importance of an open Internet to encourage Canadian innovation. Some discussion has emerged among political parties about whether to introduce legislation to require ISPs to provide “network neutrality.” NDP MP Charlie Angus has tabled a private member’s bill on the issue in the House. “Canada really needs to embrace the trend toward open network access,” Peirce said. “You need to ensure that competitors can get to the customer, that customer will be trapped in terms of … knowing the customer is locked in.” Open Internet access in Canada will be increasingly important to the public as technology converges, Google Canada policy counsel Jacob Glick said. “We can talk about these in their different regulatory silos … but we shouldn’t be limited by those schemes, because the technology is bursting free of those regulatory structures,” he said. “When we are developing the regulatory structures that conform to the next generation … the thing we have to keep in mind is that ultimately we want to preserve and nourish the open Internet.”

Facing budget constraints, Tories can pursue regulatory reform, say experts

Broadcast | February 12, 2010

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