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    The Tax-Free Six Step Approach to a Digital Economy Strategy

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    Tuesday December 18, 2012
    Several months ago in a speech to the Economic Club of Canada, Industry Minister Christian Paradis promised to unveil a Canadian digital economy strategy by the end of the year. Unless there is a late December surprise, however, 2012 will end in the same manner as every other year - with Canada as one of the only developed economies without a clear plan for success in the online environment.

    The digital economy strategy file - dubbed the Penske file due to years of "work" with no results - now stands an unequivocal failure. Despite a public consultation on the issue and numerous models to emulate, the government has puzzlingly been unable to develop a coherent vision for Canada’s digital future.

    The government could have pointed to any number of developments - copyright reform, anti-spam legislation, research tax credit changes, a pro-consumer approach at the Canadian Radio-television and Telecommunications Commission, the forthcoming spectrum auction, and reversal of the hated Internet billing dispute - as evidence that it has been active on the issue. Yet without a clear map for the future, the efforts are understandably perceived to be a policy mish-mash without a clear target.

    How to fix the digital economy strategy mess in a fiscal environment where there is little, if any, money available to pay for it?  My weekly technology law column (Toronto Star version, homepage version) points to a tax-free digital economy strategy that would have six components.

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    Paradis Promises Digital Economy Strategy By Year End

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    Wednesday June 06, 2012
    Industry Minister Christian Paradis put a timeline on the "Penske File" yesterday, promising to deliver a Canadian digital economy strategy by the end of the year.
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    Industry Committee Releases E-commerce Study

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    Tuesday May 08, 2012
    The Standing Committee on Industry, Science and Technology has released its final report on e-commerce in Canada (I appeared before the committee last October). The report has sixteen recommendations, but none are particularly innovative or surprising. They include emphasizing e-commerce in the forthcoming digital economy strategy, increasing affordability of Internet service, bringing anti-spam legislation into force, and (oddly) the need for ISPs to provide 24/7 tech support. The report also includes an inaccurate reference to a completed digital economy strategy, though it actually points only to a consultation document. The NDP offers a supplementary opinion that provides more interesting recommendations including setting aside proceeds from the spectrum auction to enhance broadband deployment, resuming Statistics Canada research on e-commerce, and establishing a digital literacy task force.

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    Digital Economy Strategy Has Become Government's "Penske File"

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    Monday November 28, 2011
    Appeared in the Toronto Star on November 27, 2011 as Digital Economy Strategy has Become Federal Government’s "Penske File"

    Earlier this month, Industry Minister Christian Paradis held a press conference to launch the Digital Technology Adoption Pilot Program, which will provide $80 million to small and medium sized businesses to integrate digital technologies. Paradis described the program as an important component of the government's digital economy strategy.

    While the program may create some useful incentives for technology adoption, it was Paradis' reference to a digital economy strategy that attracted the attention of policy watchers. The digital economy strategy has emerged as the government's "Penske File", the source of considerable discussion and much "work" but thus far few tangible results (for non-Seinfeld watchers, the Penske file has become synonymous for a non-existent work project).

    Most of Canada's trading partners have had digital economy strategies in place for years, using the policies to set goals for connectivity, guide investments in networks and digital infrastructure, as well as establish legal frameworks to provide privacy protection and enhance consumer confidence in electronic commerce.

    Canada has lagged behind with no real policy direction. In May 2010, then-Industry Minister Tony Clement conducted a national consultation on the issue, yet 18 months later, there is still no strategy in sight. There has admittedly been an election and a cabinet shuffle, but as Canada dithers, other countries move ahead with a broad range of initiatives.  

    Countries such as Japan, Germany, and Australia have all established ambitious targets for broadband connectivity, employing a mix of public dollars and regulatory incentives with the goal of establishing universal access to affordable, fast connectivity. The Canadian Radio-television and Telecommunications Commission has set a target of universal access to 5 Mbps broadband by 2015, but a report last week indicated that hundreds of thousands of Canadian households currently only have access to much slower speeds.

    In the United States, the Federal Communications Commission recently teamed up with cable and technology companies to launch Connect-to-Compete, which promises to bring computers and Internet access to low-income households.  The program includes a commitment from the cable companies to offer to $10 a month broadband Internet access to homes with children that are eligible for free school lunches. Moreover, Microsoft has committed to offering low-cost personal computers and Morgan Stanley has pledged to develop a microfinance lending program for community-based financial institutions.

    Digital strategies are not limited fostering greater Internet access. In Europe, the European Commission recently adopted a recommendation on digitization that will lead to investing billions in digitization initiatives. The strategy includes a plan to make 30 million works freely available online as well as develop legal frameworks to facilitate greater access to online materials.

    Ireland has focused on copyright reform as a means to jumpstart its digital economy.  Unlike Canada, which has emphasized restrictive digital locks, Richard Bruton, the Irish Minister for Jobs, Enterprise and Innovation, has promised to remove barriers to digital innovation by considering greater copyright flexibility through the adoption of a fair use provision.

    The net effect of these initiatives is that other countries have stopped talking about digital economy strategies and actually introduced and implemented them. In Canada, the opposite is true.

    Plans for the forthcoming spectrum auction, which holds the promise of injecting new competition into the wireless and mobile broadband markets, remains shrouded in secrecy. Legislative initiatives such as new privacy rules are stuck in neutral in the House of Commons. Anti-spam laws are in limbo as the government may cave to lobbying pressure to water down tough new penalties.

    Few would dispute the need for a national digital economy strategy, yet in the spirit of Seinfeld, the Canadian approach appears to have turned the matter into a strategy about nothing.

    Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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