Federal budget delivers innovation – and internet angst

Government plans to re-open settled issues like net neutrality to massive lobbying.

bill morneau, federal budget

Finance Minister Bill Morneau.

Federal Budget Angst:

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Canada’s Liberal government has released its budget for 2017 and it sure does deliver on the innovation theme that was promised. The word “innovation” is found 262 times in the 280-page document, a big step up from the 72 mentions in last year’s budget.

Federal budgets are typically big-picture documents short on specifics, but they’re good for understanding the government’s upcoming priorities. The 2017 budget does that, but also actually delivers a surprising amount of concrete funding plans.

There’s a lot to parse, but some of the highlights as far as technology in Canada include:

  • A change in GST rules that will see the tax applied to ride-sharing services such as Uber.
  • A new Affordable Access program that will see $13.5 million go to service providers over five years to deliver “low-cost home internet packages to low-income families, bundled together with refurbished computers.”
  • An investment of $125 million to launch a PanCanadian Artificial Intelligence Strategy to attract research and talent, with the aim of making Canada an AI leader.
  • Investment of $50 million over two years to help teach kids digital skills and coding.

The foisting of GST onto Uber is sure to draw groans from users, but it’s not entirely unexpected. Many observers had been expecting similar taxes to be applied to Netflix and other digital services, but the Liberals are forgoing that for the moment.

The AI and coding moves are wise, although where they go from here will be worth watching. As the saying goes, the devil will be in the details.

The Affordable Access funding, meanwhile, has already drawn criticism from internet advocates at Open Media. The group says between $70 million and $400 million is needed to properly connect low-income families. The current pledge is thus a “drop in the bucket.”

The budget’s more important section, however, is the part that’s less concrete. Finance Minister Bill Morneau is proposing a wide-ranging review of the Telecommunications and Broadcasting Acts that would put a lot of issues on the table.

As phrased in the document:

In this review, the government will look to examine issues such as telecommunications and content creation in the digital age, net neutrality and cultural diversity, and how to strengthen the future of Canadian media and Canadian content creation. Further details on the review will be announced in the coming months.

The proper response to this is, “Oh boy.”

On the one hand, a review of the two acts is overdue, and indeed many parties have been advocating for years that they be merged.

With telecom and broadcast now effectively running over the same pipes, as it were, it doesn’t make much sense to keep the two separate. A lot of good could be accomplished by eliminating some inefficiencies and legal anachronisms.

On the other hand, such a review opens everything up – even those things that are working fine – which means that a lot of damage or even backwards momentum could happen.

Reviewing net neutrality is a good example. Ask anyone who isn’t a telecom company (or a supporter of one) and they’ll tell you the rules enacted by the CRTC in 2009 are pretty good. Even Open Media says they’re among the best in the world.

Those rules were set to get even stronger, with Ottawa insiders expecting the regulator to come down against zero rating – or the exemption of certain web services from usage data caps – in its current review.

We can probably forget about a zero rating ban now, at least for a while, given that the federal government is going to be reviewing net neutrality as a whole, thereby duplicating much of the work the CRTC has already done.

As University of Ottawa internet law professor Michael Geist pointed out on Twitter, a wide-ranging review is also going to prompt massive new rounds of lobbying:

This is never a good thing when major telecom companies, who employ armies of lobbyists, are involved. The likelihood of the rules going against the public interest are just too great.

Case in point: this is a government that just recently caved to lobbying from Bell by giving it the green light to acquire MTS, despite plenty of evidence showing that telecom prices will go up in Manitoba as a result.

There’s reason to be optimistic about this upcoming review, but in light of the government’s track record so far, there’s also good reason to be concerned.

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  1. Yay for net neutrality, now get ready for price hikes - AlphaBeatic

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