Broadband stimulus should not focus only on infrastructure: Goldberg

The federal government should depart from previous practices of funding broadband and take a more creative approach to allocating funds under its $225-million broadband stimulus program, according to one of the organizers of the Canadian Telecom Summit. Speaking with Tech Media Reports, Mark Goldberg said that it would be a mistake if the government gave money to additional broadband deployment projects without considering the broader implications. He pointed to past failures to improve broadband penetration rates in certain parts of the country as examples that building the infrastructure may not be the best way to proceed. “Prince Edward Island has 100% broadband availability but some of the lowest broadband penetration rates in the country. That begs the question, what’s going on?” Goldberg told Tech Media Reports. “It says it’s not enough to simply build out broadband – it’s there, it’s available, it’s $40 or $45 a month. But people aren’t taking it so what’s wrong. That says we need to take another look.” In his opening remarks to the Toronto conference, Goldberg was blunt in his view of using public money to fund broadband deployment. “We’re concerned that municipal and higher levels of government are being seduced by expedience in using stimulus funds to anoint winners when public funds are being used to subsidized some of the broadband service launches,” he said. “We need to be careful with the idea of publicly funded monopolies. If we believe that facilities based competition is a policy objective for urban markets we need to question why public funds would be used to subsidize the operations of a single operator in other areas that can virtually guarantee that there will never be competition.” “We need to make sure that we are considering different approaches. An unregulated monopoly would never be tolerated in urban Canada and so we should be careful about public funds being used to create unregulated monopolies in rural markets,” he said. The problem with past government funding mechanisms, Goldberg said, is that it tends to pick winners and losers. “Once one network is built or strengthened there is relatively low chance of another infrastructure based provider entering the market given the financial advantage already awarded to the incumbent via government funding,” he said, referring to recent recommendations from the Organisation for Economic Cooperation and Development on government incentive programs. Goldberg said that there are a number of different alternatives that the government can take, including adopting a tax credit system he proposed last year, or looking to the Alberta SuperNet province-wide fibre backbone. But even there, problems could arise because a publicly funded network would compete against other backbone providers. An alternative, he said, is to look at it from an applications perspective and the fact that not all households will require a PC. Kindle, the Amazon electronic book reader, is an example of looking at the broader picture. Kindle comes equipped with mobile broadband and doesn’t charge the user a fee when downloading a book. The cost of downloading is included in the price of the book. Ehealth is a good example that could mirror the Kindle strategy. An 80-year-old patient isn’t going to subscribe to a $45 per month broadband subscription and then learn how to use a PC just to monitor their glucose level, Goldberg noted as an example. This person would get a device directly from the Minister of Health and the connectivity would be provided over existing infrastructure such as the electrical wires or the wireless network used by smart meters, he added. In this case, Goldberg said that bundling a device with broadband where the cost of connectivity is included with the device would be an innovative approach. “That speaks to a bigger picture, a bigger strategy,” he said. “The old models gets money out there, it gets infrastructure built, but if we can take a little bit of time and think of the long term implications and ensure that we’ve applied all the right creative juices, I think it’s better.”

Broadband stimulus should not focus only on infrastructure: Goldberg

Broadcast | June 16, 2009

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