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    CETA Reached "In Principle", Part Three: Meaningless Claims on Telecom & E-commerce

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    Friday October 18, 2013
    Without the CETA text, it is very difficult to assess many of the purported benefits of the draft agreement (additional posts on the need to release the text, the IP provisions, and the big win for pharmaceutical companies despite declining Canadian investment in research and development).  Consider the benefits for telecommunications and electronic commerce discussed in the government's summary document.  On electronic commerce, the government states:

    Businesses engaged in electronic commerce will benefit from greater certainty, confidence and
    Twenty years ago, electronic commerce was in its infancy. Today, electronic commerce is a part of our daily lives. Canadians shop and plan holidays online, and buy and download software and entertainment content, including movies, television and music. Advertisers are making increased use of “smart advertising” on the Web to track our shopping habits and promote specific deals likely to interest us.

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    Public Safety Foreshadowed Rejection of MTS Allstream-Accelero With 2011 Foreign Investment Concerns

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    Tuesday October 08, 2013
    On the same day that revelations about CSEC spying on the Brazilian government for economic purposes generated headlines around the world, the Canadian government rejected the proposed acquisition of MTS Allstream's Allstream division by Accelero Capital Holdings, a company co-founded by Naguib Sawiris, an Egyptian billionaire who first captured Canadian telecom attention by backing the entry of Wind Mobile. Industry Minister James Moore indicated that the rejection of the proposed deal involved the national security provisions of the Investment Canada Act. Both companies expressed disappointment with the decision, as MTS Allstream noted its surprise and disappointment and Accelero described it as an "unfounded and unexpected decision."

    While the decision sends a disturbing signal about the government's willingness to block foreign investment just months after indicating that it was open to such investment, it is worth noting that the change in telecom foreign investment policy was publicly opposed by the Public Safety Canada. In 2011, Public Safety responded to Industry Canada questions about changes to the foreign investment restrictions with the following:

    It is important to fully appreciate the scope of the potential impact of reducing or removing restrictions on foreign investment in Canada's telecommunications sector. The lessening of current restrictions could create new, and increase existing vulnerabilities in our telecommunications networks, further exposing them and the users and services that rely on them, to an increased threat of cyber espionage and denial of service attacks. It could also impede law enforcement and national security investigations by further challenging the ability of authorities to execute judicially authorized warrants to intercept telecommunications. As options are considered to maximize Canada's competitiveness in the telecommunications sector, Public Safety officials will work with Industry Canada to further develop options to help ensure that any change to the telecommunications market will be accompanied by necessary security safeguards.

    When the Public Safety submission first came to light last year, the potential application of the national security provisions in the Investment Canada Act was discussed. In light of the MTS Allstream decision, it would seem that Public Safety may have lost the battle to retain foreign investment restrictions, but has won the war to keep out many potential competitors.
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    How the Government Can Put Digital Consumers First

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    Tuesday September 24, 2013
    Appeared in the Toronto Star on September 21, 2013 as How Ottawa Can Put Digital Consumers First

    Reports over the past week have indicated that the government plans to unveil a "consumer first" agenda for its upcoming Speech from the Throne. The speech, which will set out the federal legislative and policy agenda for the next two years, is widely viewed as the unofficial start of the 2015 election campaign. 

    There is little doubt that the battle over wireless pricing, which hit a fever pitch over the summer in a very public fight between Industry Minister James Moore and the incumbent telecom companies, will figure prominently in any consumer agenda. The government is convinced that it has a winner on its hands - consumer frustration with Canada’s high wireless prices suggests that they’re right - and will continue to emphasize policies geared toward increasing competition.

    Yet a consumer first agenda should involve more than just taking on the telcos on spectrum (or the airlines over their pricing practices). A digital consumer first agenda should prioritize several other issues that have similar potential to strike a chord with Canadians across the country.  At the heart of those digital issues are two ongoing consumer concerns: pricing and protections.

    On the pricing front, monthly wireless bills are only part of the high price Canadians pay for communications services. The Canadian Radio-television and Telecommunications Commission has embarked on a review of wireless roaming fees, which studies have found rank among the highest in the world.

    Broadband Internet services would also benefit from a more aggressive, consumer-first regulatory approach. The government previously objected to usage-based billing schemes, but its emphasis on facilitating competition through independent providers has encountered resistance in recent months. For example, some customers of TekSavvy, a large Ontario-based independent ISP, have been stuck for days without service as Rogers has been slow to address problems that arise from its network.

    Inflexible and costly television packages should also come under closer scrutiny. The history of broadcast distribution through cable and satellite providers is one in which consumer interests were largely ignored. A consumer first approach would increase choice by opening the market to greater competition (eliminating foreign investment restrictions would be a start), mandating the availability of pick-and-pay services so that consumers could shift away from large bundles of channels they don’t want, and requiring providers to offer broadband Internet services without television packages, so that consumers can "cut the cable cord" if they so desire.

    Lower wireless, Internet, and cable bills would be a welcome change, but Canadians also need better digital protections against online harms. The long-delayed anti-spam law, which provides safeguards against spam and spyware, should be brought into effect by finalizing the necessary regulations. The law has been delayed by intense corporate lobbying, however, it enjoys strong support from consumer groups and was passed by Parliament in 2010.

    Consumers similarly require better privacy protections since Canadian private sector privacy legislation is now woefully outdated. Reforms arising out of hearings on the law that date back to 2006 died with the prorogation earlier this month, leaving Canadian consumers with a law that no longer meets international standards. Putting consumers first should mean that businesses are obligated to disclose security breaches and face tough penalties for violations of the law.

    Canadian consumers would also benefit from protections against misuse of intellectual property rights. That includes safeguards against patent trolls that threaten small businesses and increase consumer costs as well as provisions to ensure that thousands of Canadians do not get caught up in questionable lawsuits over copyright claims that seem primarily designed to pressure them into expensive settlements.

    A consumer first agenda is long overdue in the digital environment, where the interests of individual Canadians have often been forgotten. The next Speech from the Throne offers the chance to change course by promoting policies that result in fairer pricing and stronger online protections.  

    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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    The Telecom Union Rally Against Competition

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    Friday August 30, 2013
    Throughout the battle this summer over the potential of a Verizon entry into Canada, the incumbent telecom companies have tried to paint their position as supporting more competition, but rejecting the rules the government believes are needed to facilitate that same competition. Wind Mobile CEO Tony Lacavera recently called out the incumbents and their association - the Canadian Wireless Telecommunications Association - for opposing more competition:

    The Canadian Wireless Telecommunications - which we joined being assured it would equally represent all wireless companies in Canada - is a mere puppet of the Big Three.  Far from supporting the new entrants like WIND Mobile, CWTA has been advocating against bringing more competition to the marketplace.

    Today in Toronto, two of Canada's largest unions will hold a rally not over the wireless spectrum rules but rather over the very prospect of more competition. The release from the Communications, Energy and Paperworkers Union and the Canadian Auto Workers states that the rally is planned:

    to protest the Harper government's decision to allow U.S. telco giant Verizon to compete in Canada's telecommunications market.

    Notwithstanding persistent claims that the wireless fight is about "fairness", this rally lays bare the real motivation of many - stopping new competitors from entering the Canadian market.
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