University of Waterloo president David Johnston said Canadian companies are lagging behind in adopting technology to improve productivity. (University of Waterloo)

Canada has squandered its global lead in telecommunications and needs a national strategy to keep from falling further behind, according to the president of the University of Waterloo.

"We got in at the ground floor but we remained at the ground floor while others kept building," David Johnston told an audience of 500 during his keynote address at the Canadian Telecom Summit on Tuesday. "There's an urgent national need to regain our advantage."

In 2001, Canada led the developed world in broadband deployment but has since fallen to 10th out of 30 in rankings from the Organizations for Economic Co-operation and Development.

Canada is also well behind in adopting mobile phones, ranking 75th in the world according to the International Telecommunications Union, trailing countries such as El Salvador and Kazakhstan, he said.

Greater investment by other countries has resulted in Canada becoming a "laggard in telecommunications," he told an audience consisting mainly of industry employees, executives and analysts. Unless government and industry get together and form partnerships that fund and encourage competition, Canada will fall further behind.

Johnston is an influential voice in Canadian technology, having chaired the board of overseers of Harvard University, the Canadian Institute for Advanced Research and the National Broadband Task Force.

Waterloo, hotbed of innovation

The University of Waterloo, meanwhile, is a hotbed of Canadian innovation with a number of the country's most successful technology companies, including BlackBerry-maker Research In Motion Ltd. and broadband switchmaker Sandvine Inc.

Canadian businesses are also well behind in adopting technology to improve productivity, Johnston said. At a time when most U.S. businesses are barreling headlong into interactive Web 2.0 sites, only 63 per cent of Canadian firms have gone to the trouble of setting up a simple website.

"They still haven't wrapped their heads around Web 1.0," he said.

Much of the problem is the view by Canadian telecommunications companies that competition is bad. Competitors are viewed as "barbarians at the gate," said Johnston, who is a member of Ontario's Task Force on Competitiveness.

Johnston stressed that access to the internet must be kept neutral so that university students can commercialize the innovations they come up with in the classroom and create new competition. "Canada should be a sandbox for digital innovation," he said.

Konrad von Finckenstein, chairman of the Canadian Radio-television and Telecommunications Commission, also addressed the issue of net neutrality in his keynote speech. He said the CRTC ruling on a dispute between Bell Canada Inc. and the Canadian Association of Internet Providers, expected this fall, will only go part of the way toward finding a solution to the problem.

Controlling Bell's network

CAIP, whose members rent parts of Bell's network in order to provide their customers with internet access, filed a complaint with the CRTC in April after Bell began limiting the speeds of certain online applications.

The group, which represents 55 smaller internet service providers, say Bell's interference with traffic is prejudicial. Bell, on the other hand, says it needs to limit speeds of peer-to-peer applications because a small percentage of customers are using them to congest its network.

Von Finckenstein said the ruling this fall will deal only with the issue of the wholesale access that Bell provides to CAIP members, while the larger issue of net neutrality will be addressed later.

"It's only the tip of the iceberg," he said. "Net neutrality is far larger than that."

He also reiterated that the Telecommunications Act needs to be revised in order to give the CRTC the power to administer monetary penalties for transgressions. As it stands, the regulator can only go to one extreme or the other.

"Right now, it's 'do as we tell you or we can wave our finger at you,'" or the CRTC can begin criminal court proceedings. "That does not make sense."