Tuesday, February 1, 2011

Industry Minister Clement to Review CRTC Decision Regarding Unlimited Internet Downloads

Federal Minister of Industry, Tony Clement, today announced that his office will review the recent decision of the CRTC to effectively remove the ability of small internet service providers to offer unlimited downloading options to their customers. This intervention by the government of Canada into the simmering dispute regarding the internet is welcome by all who are concerned with keeping the internet as accessible as possible.

Canadians already pay higher rates on average to access the internet. There used to be a time when smaller internet service providers (ISP’s) proliferated, but as new, expensive and expansive fibre optic infrastructure was laid out, and the bigger telecoms entered the scene in a serious way, competition has dwindled and prices have risen. With the telecoms now commanding the lion’s share of network clientele, they’ve targeted the few remaining crumbs by attacking their ability to provide the services that their customers want.

It’s true that internet users continue to take up more and more bandwidth as an increasing number of videos are viewed and downloaded. And it is also true that the larger telecoms were the ones who stepped forward into the (admittedly favourable) gap to provide the infrastructure which makes this possible. The telecoms, however, have also financially benefited to a significant degree through their investments, as have all Canadians. It’s been a win-win situation for those who now enjoy high speed internet.

But let’s be clear: not everyone in Canada yet enjoys high speed. The telecoms stopped short of extending expensive networks into sparsely populated regions of the country, because they were concerned about a return on investment. That’s worth remarking on: they were able to realize profits by building the networks in areas where it made financial sense; where a financial case couldn’t be made, investment didn’t occur.

So, the telecoms have built the infrastructure and continue to profit from it. What’s the problem here? Well, like many massive businesses, they’ve decided that they’re not making enough profit. To further increase their bottom lines, they have hit upon a strategy which will drive their smaller competitors out of business and provide fewer, more expensive options, to consumers.

Clearly, Canadian consumers have an interest in internet accessibility, and the prevention of innovation-killing oligopolies which act as de facto monopolies. Without proper regulation and government intervention, the so-called “free market” can quickly become anything but free to small businesses which try to offer superior service to their customers.

Today, both the Liberals and NDP are saying that they would unilaterally reverse the ruling of the CRTC as it relates to metered internet usage and the imposition of a downloading cap. While this approach will undoubtedly score quick political points, the CRTC underwent a thorough hearing process before siding with the telecom giants. I’m not suggesting that I’m at all in agreement with the CRTC, but it seems to me that the government of Canada under Clement is taking a more pragmatic approach in this case, by committing to a review of the CRTC’s decision.

The opposition parties probably fear that the Conservatives will use a delaying tactic in order to prevent this from becoming an election issue. Let's hope Clement's "review" is scoped in terms of time. However, we also hear that none of the political parties want an election. I'm willing to take Clement at face value on this for now. One of the duties of government is to look into the concerns raised with arms-length regulators, like the CRTC. The government of Canada certainly doesn't meddle in these kinds of decisions every day. Clement here recognized the need for review, due to the importance of this issue. As far as I'm concerned right now, this is just the government doing its business.

Of course, my opinion could change depending on the review unfolds.

Calls to unilaterally undermine the CRTC in this circumstance are, in my opinion, premature, and could lead to a loss of confidence in the regulator’s ability to do its own job. The CRTC has spoken; now let the government do its job, and let’s wait and see what Clement has to say.

Let’s hope that the Minister Clement and the Conservative government recognize the need to keep the net accessible. The decision by the CRTC will undeniably hurt small businesses in local communities, and ultimately will prove to be bad for consumers. As we get deeper into the 21st century, we Canadians have an increasing interest in keeping prices down, and promoting local businesses. An economic model which promotes the needs of international conglomerates in preference to local consumers needs to be fixed. Clement’s review won’t accomplish that outcome, but it may end up saving the internet’s accessibility here in Canada.

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