Anti-competition everywhere in Canadian telecom/broadcast sectors.

I'm not a proud Canadian these days. It seems that everywhere I look I see some monopolist trying to wipe out free markets in Canada, and not enough government intervention to protect the market. There are individuals in the current cabinet who appear on the surface to share some ideas, but who are sending mixed messages. I also don't get the impression that there is enough support elsewhere in cabinet, with other parliamentarians and parties, or with the larger bureaucracy who should be working for us.

This week we saw quite a bit with the incumbent phone/cable companies trying to wipe out competition through the so-called "Usage Based Billing" fiasco at the CRTC for landline data communications, and through Public Mobile and TELUS trying to wipe out competitor WIND Mobile through the federal court.

If you follow the twitter feed for current Federal Industry Minister Tony Clement, you might think the government is firmly behind solving these problems.

Almost immediately after the federal court decision (See Globalive press release), Tony Clement said:

Re Globalive Fed Crt decision: we're studying ruling + examining our options. Our Govt stands with consumers who want more competition.

After seeing the reaction from the public about the Usage Based Billing decision at the CRTC, Tony Clement said:

True. CRTC must go back to drawing board RT @RosieBarton is it true you will overturn internet decision if crtc does not back down?

While I was thankful for attention to the decision, it was unfortunate that much of the public reaction didn't relate to the CRTC decision. Customers of bundles with the phone/cable companies were complaining about UBB, but the recent decision didn't have anything to do with them. Even if the recent decision is overturned, ISPs will be allowed to charge their own customers for usage.

The question was whether the companies currently running the government-granted last-mile connections to our homes would be allowed to impose inappropriate fees on their competitors : especially fees like per-byte usage fees which have nothing to do with the specific last-mile connectivity service being discussed. On this issue, in the context of a discussion with the National editor of Maclean's magazine, Tony Clement wrote:

@acoyne This is about forcing a single business model on all competitors. I'm for market choice. I guess you're not.

(For more on this issue, see my intervention before the CRTC which included a suggestion of structural separation between this last-mile natural monopoly and a competitive marketplace for services that could be built on top)

Here is the problem that I see. The decisions that Tony Clement has made thus far on these issues are temporary cabinet decisions, not long term legislative solutions where all the "i"'s are dotted and the "t"'s crossed.

When I signed up for WIND mobile I knew that if the government changed (there is an election coming soon) or someone less technically aware than Tony Clement took over as Minister of Industry Canada, that my mobile voice/data provider of choice would be allowed to fade away.

I signed up with TekSavvy specifically rejecting the incumbent phone/cable companies as options for my landline voice/data. Working in this industry I knew that the phone/cable companies were in a conflict of interest for providing proper Internet services, and that they would continue to abuse any legal, business or technological trickery they could get away with to wipe out competition.

For the same reasons I am also trying to replace my cable TV, but unfortunately the only current options for this type of content is from incumbent phone/cable companies (Rogers cable, Bell satellite, Shaw satellite). I'm stuck with paying money to companies I find offensive, not accessing the content I want, or being pushed like so many Canadians towards less legal alternatives.

These problems need legislative changes to make legal competition more stable. A cabinet directive saying to allow market forces to decide means nothing when there is so much disagreement as to what that means.

For land-line communication, the "last mile" to our homes is both a natural monopoly and an exception to property rights to allow these lines to be put above and below private and public property without asking permission of or making payments to the owners. Left in a policy vacuum, inadequate regulation allows the existing managers of this "last mile" to leverage that monopoly to wipe out competition in services built on top of those connection. In other words, we must have strong regulation of this "last mile" in order for market forces to exist at all.

We have a situation where Bell Canada has been allowed to own CTV (owned before, and will most likely be allowed to re-purchase again). This is a company that has never liked the Internet, and considers it competition to its phone service and its growing broadcast/content services.

I am a fan of Sanctuary, a science-fiction show out of Vancouver that is partly funded by and aired on Space. Space is owned by CTV, which is (will be) owned by Bell. What are the chances that the parent companies will allow Space as a channel or Sanctuary alone to be available for legal digital download for those of us who want to pay directly rather than watch through an incumbent BDU? If I could get Space directly over the Internet I would be able to drop down my cable package, putting those savings directly into purchasing more content from the creators. Phone and cable companies aren't going to allow companies they own to enable customers to skip them as intermediaries.

I suspect I'll eventually be left with the only viable legal option being to purchase the DVD's a year or more after the last episode of a season airs (2+ years after premier) . This leads me directly into how the passage of an inadequately amended Bill C-32 will mean my device shifting of that DVD content to work on the devices I own will be even more illegal than it is today given I'll continue to circumvent the TPM. Bill C-32 was tabled by Tony Clement, and contains a direct frontal attack on a competitive technology marketplace.

You can see why I'm nervous when temporary decisions by Tony Clement appear to support competition, but more permanent legislation which he tables attacks competition. This is mixed messages from one of the few people in parliament who on the surface seems to understand some of these issues.

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And that's why Bill C-32 is only the first step

And why I suspect that an attempt will be made to block artists from releasing music/videos/photos etc. directly on their own. Consider ITunes. By dealing directly with ITunes an artist gets to keep 70% of the sales price of the music. Assuming that ITunes sold $10,000.00 dollars worth of music for the artist, the artist gets to keep $7,000.00. If the same artists was working with a label, the artist would typically get less than 25% of the sales amount, or $2,500.00. If the artist is signed to the usual contract (i.e. they have to recoup their advance to see any money), they'll probably see nothing of the $2,500.00.

So for artists, getting rid of the middle men is becoming imperative. For the middle men, killing the artist's ability to work without them is imperative.

Bill C-32 is like the American DMCA a first step towards blocking the artist's ability to work without the middle men. The recent domain seizures by the United States government is I believe, the second step.


And The policy will be comming on thick and fast.

there is starting to be another front in this war.
Acording to THIS article:

The Prez wants "Unspecified ways "to promote trade and investment from clean energy partnerships [and] the steps Canada can take to strengthen intellectual property rights.""

Of course a treaty that REQUIRES DRM would make a sensible copyright law (sensible to anyone who does not live in the Hollywood Distortion field that is) almost inmposible.

Not to mention that minefield known as the USPO.

Rest assured that the last thing the American Intellectual property industry wants is anyone bypassing the intermediaries. the second last thing is anyone being entertained without paying by the month and the view.

Charles MacDonald Stittsville Ontario
Just Beyond the Fringe

Hollywood execs are incompetent

I know I harp on this often, but while the recording and motion picture industry provide the public face for the promotion of DRM, they aren't really the ones behind it. They have been duped into believing that "copy control" is a real thing rather than a marketing term, and are generally oblivious to the unfair (to themselves) deals they are making with the content delivery platform companies.

It is the technology companies behind these content delivery platforms that are behind the whole mess. Lets put the focus on Apple, Adobe, Sony and others (Microsoft as an also-ran) rather than the angry loud pawns who are a distraction from the real game.

P.S. If it were only Americans asking for this, C-32 wouldn't be the bill it is. It requires misinformed-but-loud Canadians like the membership of ACTRA, the Writers Guild, PWAC/TWUC and others pushing from within Canada for this to be seen quite correctly as a "made worse in Canada" policy.

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

Content delivery platforms

I don't see iTunes as skipping an intermediary, but exchanging one for the other. While it is true that Apple's 30% cut isn't as nasty as what the recording industry does to musicians, it is still pick-pocketing creators. We need to create better competition such that no creator feels forced into a relationship with any specific intermediary, whether a modernish one like Apple or an antiquated one like the recording industry.

The hardest thing is convincing non-technical people that "copy control" is a marketing term, and that in nearly every case where the term DRM is used we are actually talking about a closed content delivery platform. Once people recognise it is a content delivery platform, they can begin to understand the anti-competitive and other issues that will come up.

As long as they believe that "copy control" is a real thing, they'll continue to make decisions (and push for policy) that are greatly harmful to their own interests.

I tried to focus on that in my executive summary for my brief to the C-32 committee. It will be interesting to see if it is read and understood, or whether like the USA a bill will be passed without the legislators having a clue about what they are legislating.

If you want to see just how misinformed and backward-thinking some of these groups can be, see the statement from ACTRA when the Globalive decision was released. How reducing competition in platforms to communicate content can ever be "A victory for culture" is beyond me, and I strongly believe exactly the opposite is true.

ACTRA seems to be actively lobbying to pickpocket their own membership -- weird.

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