Canada must open internet networks: Senate

Canada must follow Europe's example and implement open-access rules that will force internet network owners to share their infrastructure with smaller competitors if the country is to compete in the digital age, a Senate committee report says.

Canada must follow Europe's example and implement open-access rules that will force internet network owners to share their infrastructure with smaller competitors if the country is to compete in the digital age, a Senate committee report says.

The report on telecommunications, commissioned last year and released on Wednesday, gave the government 18 recommendations on how to build a digital strategy, with open-access rules being a key factor to expanding and improving high-speed internet across the country.

"Some countries, especially in Europe, have decided that the ownership of infrastructure by incumbents, some of whom built up the infrastructure when they were government-owned telecommunications carriers, constitutes a barrier to entry. These countries have developed open access policies to allow new entrants access to the infrastructure," said the report.

"Open access is a complicated and contentious issue. This committee recognizes this but wants to see more competition in the Canadian telecommunications sector. Accordingly, the committee recommends that the government follow the European example and implement pro-competitive, open access policies."

Network sharing has been a controversial issue of late. In 2009, the Canadian Radio-television and Telecommunications Commission ordered phone companies such as Bell Canada and Telus to make their new and expensive fibre internet infrastructure available for rent to smaller firms that could not afford to build their own networks.

The phone companies, however, successfully lobbied the government into forcing the CRTC to reconsider the ruling. The CRTC has until September to file a new report.

In the meantime, Canada and the United States have been criticized by several international studies for allowing their internet markets to be split between incumbent phone and cable companies. A report from Harvard's Berkman Center for Internet & Society earlier this year ranked Canada poorly in terms of internet prices and speeds.

Phone and cable company lobbyists fired back at the Harvard report and said its findings were based on flawed data. The Senate committee, however, supported the university's report.

"The five largest ISPs in Canada are Bell, Telus, Rogers, Vidéotron and Shaw (and their affiliates). The market shares of these dominant ISPs are reminiscent of the market shares of the dominant wireless service providers when that market was arguably a cozy oligopoly for them," the Senate report said.

New digital minister proposed

Open-access rules are only one step toward a successful digital strategy, the committee said. The report also suggested the creation of a new position, the minister for digital policy, who would oversee the strategy separate from the minister of industry. Such a minister should not necessarily focus on getting Canada to adopt super-high internet speeds, but instead focus on getting those speeds necessary to bring essential digital services to all Canadians.

The report also recommended using all proceeds from wireless spectrum auctions to provide high-speed internet access to rural and remote areas, and the establishment of policies to allocate and price those airwaves.

The Senate also recommended that cabinet meetings should go paperless, that the government implement test projects on e-voting and e-registration, and that comprehensive digital literacy programs be set up in conjunction with the provinces to educate people on how to use the internet better.

The committee initially set out to study the wireless sector but decided to broaden its view after seeing Canada's competitive situation improve recently with the addition of several new carriers, such as Wind Mobile, Mobilicity and Public Mobile. The previous "cozy oligopoly" of Bell, Rogers and Telus is on its way to being broken, the report said, although some irritants — such as "unexpectedly high roaming charges" and three-year contracts — still exist.

"This report is cautiously optimistic that competition can be maintained among wireless service providers, that remaining cell-phone irritants can be addressed, and, of most importance, that the government can produce and begin implementing a strategy for an inclusive digital society," the committee said.

The Senate was particularly impressed with Estonia as the small Baltic country has been implementing its digital policy since 1998, and is thus well advanced.

"They have paperless cabinet meetings, e-voting, digital IDs, and secure, online access by citizens to their government files," the report said. "While other countries finished or consulted on digital plans, Estonians were taking advantage of the versatility of digital communications, from filing tax returns online (97 per cent of Estonians file online) to paying for parking or bus tickets with their cellphones."

Industry Minister Tony Clement last month launched a public consultation regarding Canada's digital strategy. Consultations are expected to conclude by July 9, after which the government will take up to 18 months to draft a plan.