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Keeping up with digital connectivity

Nov 17, 2023

Telecom Story FINAL

Ivey workshop convened experts from Europe, US and Canada to advance policy on broadband and reducing the digital divide

Canadian consumers expect instant access to the internet, anytime and anywhere. High-speed connectivity at work, at home and on the road is considered a necessity. Robust broadband telecommunications infrastructure is vital for human interaction and economic growth.

According to Innovation, Science and Economic Development Canada (ISED), 90% of Canadian households have access to high-speed internet.  An achievement, which Ian Scott, Former Chair of the Canadian Radio-television and Telecommunications Commission (CRTC), feels goes under-recognized.

“I don’t think government or industry has gotten enough applause for their success,” said Scott. He suggested connectivity has improved substantially in the last five to six years in Canada, including some 50 per cent of residents with fibre lines to their home. All said though, there still remained a significant digital divide here in Canada, and around the world.

With this backdrop in mind, Ivey’s Erik Bohlin, Professor and Chair in Telecommunications Economics, Policy and Regulation recently convened a workshop with leading academics, regulators and practitioners to discuss the most pressing issues facing the global telecommunications industry today. Co-hosted by Ivey’s Lawrence National Centre the forum, “Comparative Perspectives on Broadband Regulation and Access”, examined many of the geographical, regulatory and technology investment challenges impacting the future of digital connectivity.

Telecommunications challenges in Canada

While Canada has improved the rate of household internet connection over the last few years, getting to 100 per cent is going to be difficult.

“What about the last 8 or 9 per cent? This is hard and there are barriers which need to be addressed,” said Scott. In his report card on Canadian telecom sector, Scott notes the country’s vast geography, particularly in the North, as a persistent concern and fundamental business challenge.

Heather Hudson, Professor Emerita from the University of San Francisco, who studies connectivity issues in Northern communities, believes a fresh look at corporate incentives is needed.

“One of the problems in Canada is there are programs, they are capital expenditure programs,” said Hudson. “They give the recipients money to build out a network, or upgrade a network, but then you’ve got the operational expense costs. (Companies say) I don’t care how much money they give us, unless we can figure out how to operate it, I’m not even interested.”

Furthermore, given the fact Canadian consumers pay substantially more for telecommunication services compared to jurisdictions such as Europe and the US, the concept of telecom affordability needs to be a policy priority.

“I don’t think we have enough data or enough analysis to know who can’t afford it when it’s available,” said Scott. “It is a government-wide, not regulatory responsibility. There needs to be a comprehensive approach to who requires assistance and what is the best form.”

Additionally, according to Hudson, there isn’t enough attention being paid on technological advances and  growth in mobile usage.

“For broadband we talk a lot about fixed networks, but the users more and more are doing their schoolwork on phones, playing games on phones,” she said.

Hudson continues, “connecting on conferencing and social media, and we need to know how that piece fits in. If they are going to use their phones is there enough bandwidth, what about pricing, and are we building out the networks appropriately.”   

The fair share debate in Europe

Some researchers at the workshop noted that while the regulatory framework in Europe has contributed to low cost of telecommunications services, the region is facing a massive investment gap to keep up with technological advancements in broadband and 5G networks. To date these capital costs have fallen on the shoulders of the telecom operators, rather than large streaming, social media and e-commerce platforms, that take up substantial bandwidth.

Georg Serentschy, an expert on European telecommunication regulation noted, “When operators noticed we need new resources, new sources of income to build the networks, that led to the fair share debate. It was built on the belief that the streaming platforms should be paying their “fair share” for the build-out of the networks.”

This remains a “hot potato” issue in Europe without a foreseeable resolution in sight.

Hudson, Scott and Serentschy participated in a panel discussion, moderated by Professor Romel Mostafa, Director of the Lawrence National Centre.

Supercharged Sessions

In addition to the panel discussion, the workshop featured 10 presentations from experts across the world and was attended by 60 professionals.

In his keynote, the CRTC Vice Chair Adam Scott, highlighted the different roles played by several government institutions in shaping Canada’s telecommunication policy and perspectives that different players and interests have on recent Canadian policy issues. The concluding keynote, delivered by the ISED Director General, Andre Arbour, centered on the implications of market structure on various telecommunications market segments, underscoring several important differences and also concerns across the segments.

Professor Carlo Cambini, Politecnico di Torino, explained how analyzing geographical segmentation of regulation provides insights into designing policy around investment incentives and facilitate joint investments. Ms. Annegret Groebel of the BZNetA (the German regulator) offered her informative overview of the EU regulation of the telecom landscape, noting that the most recent legislation (the “Code”) has provided the fundamental goal of connectivity in addition to the more traditional goal of competition. Prof Gerard Pogorel of ParisTech emphasized the on-going evolution toward hybrid markets which included both competition and cooperation, and where the state aid has taken a completely new role in the last decade. 

Turing tables on the notion of open access, Professor Eli Noam of Columbia University, explored the potential of the Big Techs to embark on a path traditionally pursued by telecommunication firms. He argued that such dynamics will lead to new battles for “open” access of software, data and application that are yet to be addressed by regulators and courts but will be the next logical step of the regulatory evolution. Professor Glenn Woroch of University of California at Berkeley offered new perspectives on stimulating investments in the middle-mile networks, and not just the networks closest to the consumer. His analysis suggested that the middle-mile network will have important implications for network quality and broadband adoption, and simply put, this overlooked area of broadband support has high efficiency potential, drawing on experience from California.

All in all, participants at the workshop observed the need for fostering such discussions in the future on the important topic of telecommunication policy and its socio-economic impact on Canada and around the world.

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