Letter to Parliamentary Industry Committee: recent "Manufacturing" report and telecom deregulation.

The following is a letter I wrote to the committee:

Subject: Disappointed in past report, confusion on deregulation conversation

Dear James Rajotte, Chair of Standing Committee on Industry, Science and Technology
Paul Crête, Bloc Co-chair
Hon. Dan Mcteague, Liberal Co-chair
Brian Masse, NDP Industry Critic

Copy to: James M. Latimer, Clerk of the Committee

I am writing to discuss the work of the Standing Committee on Industry, Science and Technology. I am involved in related areas as a self-employed consultant, as well as a volunteer policy coordinator for various organizations. The two areas are "Report 5 - Manufacturing: Moving Forward - Rising to the Challenge", and the current conversation around "deregulation of telecommunications". In both cases I believe that different issues are being confused, and that the solutions proposed will backfire against the interests of Canadians, and against a free market.

Part of report 5 is a recommendation to ratify the 1996 WIPO treaties. While the report talks about counterfeiting and issues relating to patents and trade secrets, the 1996 WIPO treaties are entirely about Copyright. While I understand that some members of parliament are concerned about the USTR Special 301 Watch List, the primary reason that the USA isn't on this list itself is because it is the author of the list. The globally controversial changes to copyright being proposed in the 1996 WIPO treaties, and by the USTR and related special interests, are primarily of a protectionist nature. These proposals are about protecting specialized business models already dominated by US vendors, not about protecting the interests of creators or innovators. The music filesharing case that is often mentioned only happened because of our more robust privacy legislation, not because of our already strong Copyright Law.

In early 2006 Mr. James Rajotte tabled petitions from Canadians that, among other things, "call upon Parliament to ensure generally that users are recognized as interested parties and are meaningfully consulted about proposed changes to the Copyright Act". I find it frustrating that a recommendation about Copyright law was made in a report that should have been understood as unrelated to Copyright. These consultations didn't include Copyright-related stakeholders to speak on the issue, likely because Copyright is outside the scope of what was being studied.

While I consider this issue important, I was left trying to use humour to try to explain the issue on my BLOG:

Plastics manufacturers oppose plastic-free distribution of music?

The issue of telecommunications deregulation is even more confusing. We live in a country that has had government sponsored and protected telecommunications and broadcast undertaking monopolies for many years, and as a strong supporter of free markets I recognize a need to regulate these monopolies. The idea that government can just step out of the way and free markets will form does not make sense. The government must regulate the economy though strong competition/anti-trust policy in order for there to be a free market at all.

There are aspects of the telecommunications infrastructure that, like much of our transportation infrastructure, are natural monopolies. The analogies that were made in the 1990's about an "Information Superhighway" would be helpful to think about again. We did not create a private transportation infrastructure that had the inefficiencies and competitive problems that would have resulted if all our roads were private and allowed the owners of the road to charge fees and/or deny permission to use the road based on entirely private business interests. We had roads that were managed by appropriate levels of government which then offered these roads in a completely neutral way, not charging fees or denying permission based on private business interests. All sectors of our economy use this neutral network of roads, and it was upon this that our economy was built.

Telecommunications is similar in that there are aspects that are a natural monopoly, and aspects which should be offered by all sectors of our economy. What is often called the "last mile" is a natural monopoly, and like our road infrastructure should be either government owned/managed or strongly regulated to be entirely neutral.

If I were to imagine an ideal situation, it would work as follows:

Every home would have a fiber (or similarly very high capacity) connection that connected to the municipal infrastructure, much like our driveways connect to our municipal road infrastructure. Connectivity within the city would be included within a fee paid for this utility, much like how other utilities are paid. All of our communications services, whether voice (including legacy phone services), video (including legacy cable services) and data (including legacy Internet access) would be services that we could subscribe to using this infrastructure, possibly subscribing to multiple providers if such a bundle would better service our needs. A switch between one service company to a competitor would not require any physical infrastructure changes, just a configuration change in our communications equipment and a billing change.

If a vendor of voice, video or data services is allowed to own and privately control this "last mile" of connectivity, then a competitive marketplace is simply not possible. The current direction of the Industry Minister seems to grant even more private control over this infrastructure, rather than either strongly regulating private sector owned infrastructure and/or promoting municipal infrastructure projects to allow this "last mile" to be entirely neutral from any service provider.

We need to be separating basic infrastructure from services that would use this infrastructure. While deregulation of the services over this infrastructure is appropriate and welcome, deregulation of the infrastructure itself would eradicate any potential benefits of deregulation and will kill what little competition currently exists.

I am willing to meet with any member of parliament to further discuss these issues. Thank you.

Russell McOrmond
[other contact info removed]

Policy Coordinator for CLUE: Canada's Association for Free/Libre and Open Source Software

Co-coordinator for Getting Open Source Logic INto Governments (GOSLING)

Coordinator for Digital Copyright Canada forum

Additional notes on Network Neutrality:

The position of Industry Canada on the Net Neutrality Debate

"I used my book author analogy to explain what Net Neutrality is all about.

Say I write a book with Microsoft Office. If the book turns out to be a best seller, should Microsoft receive a cut of the royalties? Should Microsoft have the ability to authorize whether you are allowed to print or distribute the book? Most rational people would say no, Microsoft was paid for Office when it was purchased, and it should never matter how valuable the content is that is created using this tool. This is in fact what the Telecommunications Companies are asking for — they want a cut of the value that other people are generating simply because wires which they manage (and customers already paid for) are being used."

CLUE policy coordinator at the Alternative Telecommunications Policy Forum

"In the early 1990's when telecommunications policy people were discussing new media, two divergent visions emerged. One vision is the Internet as a democratizing force where individual citizens are able to make their own independent choices about how the network will be used. The other vision was as an advanced delivery system for the products of existing content industries."

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Bad typo..

This letter read:

"The idea that government can just step out of the way and fee markets will form does not make sense. "

I meant to say "free market", and the missing "r" totally changed the intended meaning.

Free/Libre and Open Source Software (FLOSS) consultant.