Telecom industry seeks incentives, less barriers to implement a national digital strategy

The federal government should remove regulatory and fiscal barriers and offer incentives if it expects the telecom industry to build the broadband infrastructure required to underpin a digital economy. Executives from Bell Canada and Telus Corp. made the comments a week before Industry minister Tony Clement hosts an Ottawa conference to discuss the possibility of a national digital strategy. “The number one priority is investment in broadband because without a broadband infrastructure of the highest order, you can’t build an ICT or digital media economy upon it,” said Michael Hennessy, senior VP, regulatory and government affairs, Telus in an interview with Tech Media Reports. “Number two is to recognize that either the government builds it or private sector builds it. With a $50 billion (federal) deficit, it has to be the private sector,” he said. Hennessy says for private sector to invest in broadband infrastructure, the government must remove regulatory and fiscal barriers and offer tangible incentives, such as better cost allowance rules and an improved R&D regime that rewards private sector investment. Fee-for-carriage, ISP taxes, and R&D contributions are things the government should abandon, he added. “We have to recognize that all the debates we are having about regulation and taxing are all really disincentives to investment.” Mirko Bibic, senior VP, regulatory and government affairs, Bell Canada, told a panel discussion at the 2009 Canadian Telecom Summit Tuesday that to achieve next generation broadband in Canada, the answer lies in “lots of investment,” noting that it’s important especially given that Canada is in the grips of a recession. “A recipe for failure is continuing to criticize Canadian ISPs needlessly …while at the same time implement old style legacy rules that discourage significant private investment in next generation networks.” For a digital strategy to work, Bibic said government and other stakeholders must realize that the ICT is an eco-system with different components whose individual needs must be addressed separately and satisfactorily. “And by components of the eco-system I mean the network providers, equipment manufacturers, application and software developers, users, and of course a skilled ICT labour force.” If the private sector takes the lead in investing in broadband infrastructure, Hennessy envisages the process to be a collaborative effort between separate carriers, the IT sector, the digital media sector, broadcasters, content producers, and application developers. Calls for a national digital strategy have recently reached the highest echelons of government. Industry minister Clement recently promised to work with industry leaders to develop the strategy. On June 22, Clement will host a conference in Ottawa that is expected to draw about 200 top level executives from the industry. Ontario premier Dalton McGuinty has also pledged to lend his government’s support for the strategy. But as momentum gathers for the strategy, Bibic said when it comes to broadband, Canada has always been well-served. Citing a report from the International Telecommunication Union, Bibic said Canada was ranked second globally in the delivery of affordable wired broadband services, “despite the alarmist commentary from those who choose to be critical without a critical analysis of the facts.” Bibic took issue with a recent OECD report that ranked Canada far behind. In the ITU report, the UK ranked behind Canada, while acknowledged leaders in broadband delivery like Korea and Japan were ranked sixth and 17th respectively, Bibic said. As industry leaders prepare to meet Clement, Hennessy said it might be prudent to review the findings of the Telecom Review Panel of three years ago, which he said contained useful suggestions, including additional support for Canada’s broadband infrastructure. As well, Hennessy suggested that the federal government shouldn’t be changing Industry Canada ministers so frequently. “We don’t have to reinvent the wheel every time we go at this. It would be nice to have industry ministers last longer than six months to a year, whatever they seem to,” he said.

Telecom industry seeks incentives, less barriers to implement a national digital strategy

Broadcast | June 17, 2009

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