Search Results for: unintended

The Don’t Lock My Freedom website purports to represent consumer interests, when it is quite possible the net effect of its advocacy will be to raise initial phone prices and long term service costs. 

An article on Cartt.ca highlights these key flaws in the overly simplistic viewpoint that appears to have motivated the proposal to require wireless service providers to unlock phones.

The organizers of the website and the legislative supporters ignore the fact that there are already lots of alternate channels for people to buy phones without locks. There are service providers who have announced that they will unlock phones for their subscribers. Thanks to on-line third party sites like Tiger Direct, anyone who wants can buy unlocked phones, even if they aren’t in major metropolitan areas. Do a search for “unlock codes” and you will find lots of options at pretty low prices.

In other words, the marketplace is working without government intervention to dictate specific business models to the service providers. Now, I know that some will argue that most phones are being bought from the wireless service providers and have contracts associated with them. Maybe that is because people like the subsidies that they are receiving? Or they appreciate the ability to call the service providers’ technical support lines and have them recognize the model number and provide help.

Michael Geist is quoted in the Cartt.ca article saying:

In certain respects, this was an odd question to even have to ask. No one would ever question whether consumers have the right to tinker with their car or to use the same television if they switch providers from cable to satellite, yet the wireless industry somehow convinced the public that unlocking their phones – consumers’ own property – was wrong.

How many people who buy a Chevy expect a Mercedes dealer to fix their transmission for free? Or vice versa? Would a Ford dealer even be expected to be able to diagnose what is wrong with your Lambourgini? Is the next private member’s bill going to force car dealers to get rid of their oil change and service departments?

The metaphor for TVs just doesn’t hold up to scrutiny at all – unless Professor Geist has figured out a way to use his Bell TV set-top box for Rogers cable service, or vice versa. Maybe that is another private member’s bill.

If a phone that was sold by Rogers is unlocked and now is getting used on the TELUS network, which customer service line should the consumer call to find out how to load a Facebook application? When the TELUS representative has to spend extra time trying to learn the menu system for a model that was never sold by them, who should pay for that call?

How many consumers will be told to take their phones back to the original store for help with the software?

Should you be able to unlock a phone is a very different question from the government dictating a specific business model that requires all phones to be unlocked. The right to unlock phones is part of the copyright reform act, Bill C-32.

The Cellular Freedom Act appears to be naively motivated and could ultimately inconvenience most consumers.

Last week, Bell and Bell Aliant filed a cabinet appeal saying that a consequence of the CRTC’s Cybersurf speed-matching decision is to discourage investment in next generation FTTN networks. That appeal is similar to one filed the evening before by TELUS. There was also an appeal filed by MTS Allstream of 2 different CRTC decisions, dealing with wholesale access to unbundled ethernet. [Links to the various decisions can be found here.]

A general concern associated with regulation is the potential for unintended consequences to arise from intervention in the marketplace. This is why it is Canada’s official policy to rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives.

In his February speech to the Canadian Film and Television Production Association’s Prime Time conference, CRTC Chair Konrad von Finckenstein commented that the Commission is always particularly concerned about unintended consequences associated with its actions. Earlier this week, in the New Media proceedings, the Chair commented:

You know, we, like everybody else, avoid unintended consequences and when you just look at things through one lens, like in this case the broadcasting, you may have produced some consequence you didn’t want to because you didn’t look at the overall picture or you didn’t have jurisdiction for it.

The CRTC determination on matching speeds may have made sense through the lens of Section 27(2) of the Telecom Act:

No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

Keep in mind that Not all discrimination is forbidden. There is such thing as “just” discrimination.

In May 2006, the CRTC found that TbayTel had discriminated against its competitor, Superior Wireless, but its actions did not constitute ‘unjust discrimination’ under the Telecom Act. TBayTel was found to have treated the customers of Superior Wireless differently from the way it treats roaming customers of other carriers, however there was no ‘unjust’ discrimination, when considering the degree of competition in wireless services.

What constitutes a “sufficient degree of competition” in the services being examined? How can we be certain that there is an adequate measure of the degree of competition and that the statistics are reliable?

Had a similar lens been applied to examine internet services as the Commission used for mobile wireless in Decision 2006-33, would the outcome of the decisions under appeal have been the same?

Consequences of regulatory overreach are discussed in a recent Truth on the Market blog post. Lessons in Regulatory Humility Following the DMA Implementation resonated with me, even before Canada’s Online Harms Act was tabled in the legislature. Peter Menzies and Michael Geist each write about the extreme overreach in Bill C-63, the Online Harms Act.

In response to regulatory overreach, I have been writing about the need for greater humility for almost as long as this blog has been around. Last year, I wrote “Politicians looking to score points with intervention in the digital marketplace should carefully reflect on whether new laws are actually needed.” Seven years ago, I observed “Canada was among the first regulators to set out a light-touch approach to internet regulation” (in 1999).

The Truth in Markets post warns about unintended consequences arising from the European Union’s Digital Markets Act (DMA).

To comply with the DMA, digital platforms will have to adapt their business models, governance, and even their “digital architecture,” which will affect how they provide services and monetize their assets. These changes will be felt not only by the platforms themselves, but also by the services that run on them (whether called “business users” or “complementors”) and by consumers, all of whom will be forced to grapple with new risks or a potential reduction in quality.

Canadians have experienced platforms reducing the quality of user experience in response to government legislation. Facebook removed news from Canadian feeds because of the high costs associated with compliance with the Online News Act.

Apple has warned that aspects of the DMA creates new risks for users. “The new options for processing payments and downloading apps on iOS open new avenues for malware, fraud and scams, illicit and harmful content, and other privacy and security threats.”

The reaction to some of the gatekeepers’ announcements regarding their DMA-compliance plans shows how we could quickly be thrown into a downward spiral in which regulations beget more regulations. Once the first layer of regulations fail to yield the desired results, politicians, consumers, and business users demand more regulation. This leads, in the end, to more heavy-handed rules like the aforementioned price controls or structural separations.

Regulations beget more regulation. Former CRTC Vice-chair Peter Menzies warns about the Province of Quebec seeking to create its own streaming rules. Will another layer of regulations increase the availability of French language content? Mr. Menzies warns, “there is a widely held view that should the regulatory burden be viewed as overly cumbersome, many smaller streaming companies might make their services unavailable in Canada. And it’s not entirely out of the question that some large companies could follow suit.”

Legislation and regulations are almost always designed with aspirational objectives. Unfortunately, there is often insufficient analysis of the consequences of regulatory overreach. Truth on the Markets warns about jurisdictions rushing to be first with digital market legislation. “Countries that take their time, however, to study markets, perform proper regulatory impact analysis, and enact a serious notice-and comment-process, will be those most able to learn from the experience of other regulators and markets. These regulatory impact analyses should, of course, also consider the possibility that the regulation in question may not be necessary at all”.

As I have written before, “we need to explore policies for the digital economy with the thinking of a chess master”. There is a real need to think at least three or four moves ahead.

Are regulators losing sight of the target objectives? Are we sometimes confusing the means with the end? Do we even know where we are aiming?

Big questions. What do I mean?

When Navdeep Bains was Minister of Innovation, Science and Economic Development, there was a very clear statement summarizing his communications policy objective: “Canada’s future depends on connectivity”. It was clear, concise, and measurable. The telecom sector was told that there was an understanding of the tension that exists as we balance affordability, quality, and coverage in the achievement of those objectives.

Sometimes, it can be easy to lose sight of the target when we don’t pause for a moment to surveille the situation.

Earlier this week, I wrote “Regulators regulate”. If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.

Take a look at what is going on south of the border with the FCC seeking to resurrect network neutrality regulations. As Professor Daniel Lyons of Boston College writes (quoting Justice Scalia), “Like some ghoul in a late-night horror movie that repeatedly sits up in its grave and shuffles abroad, after being repeatedly killed and buried…”

After three years of quietly effective telecom regulation, the Federal Communications Commission has roared back to life with a new Democratic majority and an obsession to reimpose 2015’s Title II order on broadband providers. Back then, the AEI Tech Policy blog argued that these rules were, at best, unnecessary and, at worst, harmful to consumers and innovation. America’s experience since then has vindicated the decision to repeal net neutrality, leading one to wonder why this has become the Commission’s most pressing concern.

He rhetorically asks (and then answers), “if broadband providers have voluntarily adopted net-neutral practices, what’s the harm in enacting them into law?”

One concern is the chilling effect such rules have on innovation. For example, network slicing, which many providers have implemented since the original net neutrality overturn, can enhance 5G network productivity. This allows wireless providers to dedicate a portion of their capacity for specific services rather than general network packet delivery, thus improving the consumer experience for latency-dependent services.

He argues that net neutrality proponents have strayed from their roots, losing sight of the target. “When Professor Tim Wu first coined the phrase, he was concerned in part that without a neutrality principle, broadband providers would block disfavored speech online.”

Unsurprisingly, allegations that net neutrality’s repeal would mean consumers couldn’t get abortion information or receive the internet “one…word…at…a…time” were unfounded. This is because, as Wu himself notes, broadband providers also have incentives not to block content: the more content a consumer can reach, the more they’re willing to pay for access.

So why is the FCC seeking to re-introduce Net Neutrality? Regulators regulate. There is always the potential for regulatory creep. And, therein we find the concern. According to Professor Lyons, FCC Chair Jessica Rosenworcel has stated she has no intention of regulating broadband rates, despite those power being part of the proposed regulations. While this might be so, what happens with the next administration? Poorly drafted legislation – or trying to apply one set of regulations for something else – can lead to unintended consequences.

That is what I meant about being more concerned with the ‘means’ than the ‘end’. What problem are they trying to solve?

This is a problem that I think we have come to appreciate in Canada. The government is trying to apply Broadcasting Act legislation to internet content, expanding the role of the CRTC to act as an arbiter of new media.

What are we trying to achieve? How will we measure success?

Let’s look at how the government’s describes the legislation.

• C-11: “The Online Streaming Act modernizes the Broadcasting Act and helps ensure Canadian stories and music are widely available on streaming platforms to the benefit of future generations of artists and creators in Canada.”
• C-18: “The Online News Act aims to ensure that dominant platforms compensate news businesses when their content is made available on their services.”

In the government’s own words, these are the objectives of these Acts. Reading the legislation, one might be justified asking if we might have gotten lost along the way. As the government and the CRTC move forward with development of regulations that implement the Acts, how do we ensure we aren’t losing sight of the target?

When I load an address into my GPS, the system calculates a route and tells me how far the system expects me to travel. I’m told how long it expects the journey to take. Along the way, the system makes mid-course adjustments, considering traffic, routing around unexpected roadblocks along the way.

The Online News Act, and the Online Streaming Act are the first parts of Canada moving to regulate internet platforms and content.

What are the real objectives? Where are we trying to go? How will we know when we successfully reach our target? How do we know we are making progress toward the ultimate objective? Are these pieces of legislation still the best route?

When driving, we find alternate routes to avoid traffic jams and roadblocks. Is it time for the government to pause, reboot the system and recalculate?

How should parliamentarians approach the public policy challenges arising from emerging technology such as Artificial Intelligence (AI)?

That question appears to be the raison d’être of a multi-partisan working group known as the Parliamentary Caucus on Emerging Technology (PCET). The Caucus is co-chaired by Members of Parliament Michelle Rempel-Garner, Anthony Housefather, and Brian Masse, as well as Senator Colin Deacon. The Caucus was formed recognizing that emerging technologies, such as artificial intelligence, are usually deployed “faster than the speed of government.”

PCET recently issued a report as an update on its summer discussions with various parties from Canada and abroad. The report listed key take-aways:

1. Canada needs more forums and opportunities for multi-partisan discussion and education on issues like AI, in the House of Commons and the Senate
2. Canada can benefit from working collaboratively on the international stage on these issues
3. Consider how standards and other tools can help to address the issue of AI in the interim, as we await for legislation to be in force
4. It is worthwhile to look at ways for government to have regulatory agility on AI
5. Canada should consider what other international players are doing, and how their approaches could be implemented in the Canadian context

Earlier this year, I wrote a piece called “Regulatory humility”, suggesting that a little more regulatory humility goes a long way to minimize unintended consequences.

I am encouraged by the initial set of take-aways, especially the section calling for regulatory agility in approaching regulation of emerging technology. “The PCET was founded on the principle that oftentimes, regulators and parliaments are left playing catch-up on new technologies. With AI’s capabilities quickly expanding, and as these technologies are rapidly deployed, other mechanisms must be explored by the government to protect Canadians while also encouraging innovation.”

As I have written in the past, “Politicians looking to score points with intervention in the digital marketplace should carefully reflect on whether new laws are actually needed. What problems are we trying to fix?”

PCET says its approach favouring regulatory agility would “ensure that the digital economy is not left behind in Canada, while also recognizing that having regulatory agility could mean that concerns are mitigated more promptly.”

That is a reasonable philosophy. And the multi-partisan working group is a welcome approach.

While on the topic of AI, on October 23 there will be a webinar from the International Telecommunications Society looking at “Achieving Equitable AI Governance: Balancing Innovation and Responsibility”. The one-hour webinar begins at 10am Eastern and registration is free. Frequent readers know that I have been a big fan of the ITS webinars for staying current on emerging policy issues with top subject matter experts from around the globe.

I hope to see you on-line.