Lag in public perception of city’s connectivity status is surprising to former Rogers honcho.
Mayor John Tory on Tech:
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In part one of my conversation with Toronto Mayor John Tory, we discussed some of the big traffic issues facing Canada’s largest city and how technology can play a role in helping ameliorate them.
The short version of this interview can be found on the Toronto Star’s website. Part two, in which Tory talks about some of the connectivity problems Toronto is facing, follows here.
You mentioned Beanfield, which is wiring condos with super-fast broadband at inexpensive rates. Company executives say they can’t do houses because it’s too hard to dig up streets, which means most Torontonians have only expensive options from Bell and Rogers. What can be done to encourage players like Beanfield to build to houses?
I’m a free enterpriser so this might be me saying, well look, I don’t think it is fair now to say to people that have made those investments – it’s a number of companies not just Bell and Rogers, it’s Telus and so on – that the city is going to facilitate more competition or invest in it.
It’s not up to us to take taxpayer money and put it into that kind of competition. It’s up to somebody in the private sector to decide that they want to make that kind of investment.
I also don’t think it’s fair to say that you’ve built out a network over a long period of time and, except if you’re paying fair rent, we’re going to deem that to be public property and let everybody compete with you.
Part of the reason that Bell and Rogers and Telus charge the rates they do is they’re recovering the costs made over a long time of capital investment. And by the way, it’s not capital investment that has stopped.
I’ve talked to them both recently, Bell and Rogers, and look at Bell. They’re investing a billion dollars in taking fibre further out into the system.
I think they’d take a pretty dim view if someone were to come along – it’s not really in our jurisdiction anyway – and say, ‘Well that’s terrific that you’ve done it, but now we’re going to pass a rule that says everyone can use that network and not pay fair rent.’
I think you have to hope that… they step up, as Bell has done and make these kinds of investments that triggers a response from their competitors and that other people are at least prepared to look, even if it’s on a limited basis like Beanfield has, at coming into the marketplace.
I doubt in Japan and Korea that it’s been the government that has taken the initiative and made the investment to make sure they have a more connected and higher-capacity broadband system than we have. They may have had rules to encourage that investment, but I doubt they made it.
I doubt they created rules that said, ‘We’re going to let you have a free ride on the investment of those made in the past.’
Fresh off that conversation with the venture capitalists, I’m going to go back to the industry and say, ‘This worries me. I’m not being critical of you, it’s up to you to make the investments you need to make, but I’m worried…’
I was posing the question to [the VCs], ‘What’s it going to take to make sure that the tech entrepreneurs in increasing numbers come here?’
We’re doing okay with that. Depending on whose calculations you use, we’re the third-most vibrant centre for tech startups in North America, but if you want to stay third and maybe move to second, what do we have to do?
One of the things they said is, ‘You have to make sure your connectivity is improved.’
That’s when I said, ‘What?’ I’d always been told even when I was an executive that we were the best.
Was it the affordability they were talking about?
It was portability, it was capacity. We’ve got Beanfield in that one place and up until Bell gets their build done I don’t think we have wide-spread capacity. I don’t think we’d have the portability in Seoul or Tokyo, to name two places.
They were talking about a fairly broad spectrum of connectivity issues and telling me we’d rank at a five or a six out of 10 when I would have said 8.5 or something.
I’m not sure the answer lies in government intervention, but it maybe rests in government leadership where I can go out to see these people I deal with fairly regularly from those companies and say, ‘Is it true what they tell me, that we’re not in as advantageous position?’
They may have wanted to boast this for issues of consumer consumption, ‘Oh you’re riding on the fastest, most reliable network.’ Maybe that’s true for Canada and maybe even North America, but again are we resting on our laurels?
That’s the conversation I haven’t even had yet because this just happened … but I’m going to. I’m doing it more as the mayor to ensure we stay competitive.
So it’s more the carrot than the whip?
I’m saying what can we do to help? Frankly there’s not much I can do to convince them to put up billions of dollars, short of a business opportunity and short of saying that maybe if you don’t do it there’s a price to be paid. You might have people that will move out.
When we had Cisco doing their innovation centres here, one of five in the world, recently we had a couple of other global companies that have come here, they talk about that as being an important consideration.
They talk first and foremost by far about the talent pool of people we have here… but they certainly talk about issues of baseline connectivity.
Wind recently launched cellphone service on the subway, but not Bell, Rogers and Telus. Those three have launched service in the Montreal subway, so what’s the problem here?
I took the Wind announcement as it came so I asked around the others, saying they’re getting all gunned up to come and follow and they said, ‘No, probably not.’
I’m not being critical of this because it was a decision taken in the past which undoubtedly seemed like a good idea at the time, but the way the TTC set it up is they put a company in the middle. It’s an Australian company [BAI] and they’re paying them a certain amount of money.
They’re building it out as fast as it suits them from the standpoint of return on their investment. I was told that in Montreal the [wireless] companies did it together and they did it without the middle-man involved.
Here, what you have is the middle-man was able to go and do its first and only deal with Wind – I’m not diminishing that because it’s important – but it’s 400,000 customers. You have the big behemoths with several million customers saying it will be quite a while.
The business justification for doing it, especially if they all have to go and do individual deals with that Australian company, how much more revenue are you going to get for telling people they can talk on the subway now? Not that much.
They’re going to have to make a significant investment, especially if they have to do it one by one by one.
Was it a bad idea getting BAI involved?
Everything always looks different in hindsight. I can’t really comment on that. You make those decisions based purely on the economics, so maybe the Australian company came along and said we’re going to pay you the most money. If you’re a transit system that’s short of money and you need it to roll out new streetcars, then you say, ‘Okay we’ll take that deal.’
I don’t know the full basis on why they picked it, but I do know two things. One is that I think under the auspices of that company the rollout of wi-fi and cellular technology in the subway has been slow compared to many other cities in Canada and North America.
Secondly, that setup doesn’t appear to be an inducement to get the big boys to come and join the party.
But you live with these decisions and my understanding is there are certain thresholds in the contract that apply over time. If they’re reached or not reached it can affect the ability of these companies to come and enter, but it’s some time away from that.
By the way, [Councillor] Josh Matlow put forward this benign suggestion that would be a tiny step forward in having the city more connected, and that is in some of the major public places [like city hall] you’d have wi-fi made available.
You have never in your life seen an email torrent like what happened from the group that are concerned about the health effects on everything from children to animals.
When this would come up when I was in provincial politics, or even when I was a talk show host, [you knew] that the federal safety authorities are not going to allow to remain in place rules that are harming the health of people.
These emails saying to us, ‘Don’t you dare even go anywhere near this idea of Councillor Matlow,’ who they portray as being close to the devil.
It just happened last month. They’re attaching studies from different places in the world saying this is bad for you, so that’s something that could slow down the pace of “progress” because of the fact that it becomes politically difficult.
Back to the subway question, do you not have some pull with Rogers? And the flip side of that, will people always see that as a problem given your history with Rogers?
I’ve declared a conflict on Rogers-related matters. I don’t take part in discussions regarding regulating or doing business with Rogers or anything to do with that. I’ve been very open with my past and continuing relationship with the family so it’s all on public record. I’d say I’d follow the rules and I do.
That didn’t stop [Bell chief executive] George Cope from coming in and dealing with me because he knows I’m a person of integrity. They know I’m going to be straight up with them, as I would be with Telus or anybody else.
If they’re coming to build something in the city, it’s my job to make sure they get looked after. If there’s any problem with that in the context of my past employment, then they’ll go and see someone else.
It isn’t a question of pull with Rogers. They would describe it as barriers to be less interested. I don’t think it prohibits them. Wind was willing to do it and put up with this. Rogers, Bell and Telus have all said we’re not going to go with that regime.
One of those companies – I won’t say which one – said the approach was wrong, ‘They should have come to us and said you do this together because you all have an interest in making this service available to your customers so you can share in the joy of doing it and then you compete for customers. You don’t compete for who has the service and who doesn’t.’
I don’t know if that answer’s right or not, but it’s the answer I got. I’d say Rogers is unlikely to move first based on what I heard, or Bell or Telus, just because they say it’s not worth it.
You’ve also talked about improving customer service through technology. Can you expand on that?
I walked into this building as the mayor, I’d never really worked in here before, and find that whether it’s our email platform that was changed over – it was 10 years old – or the technology that allows people to book their swimming and soccer signups, they complained miserably about that for good reason.
Pretty well every aspect of technology in this building, if I said to you could you do this audit, you’d tell me it’s two generations out of date from what’s commonly used in business let alone leading edge.
That has had two effects. It stops us from presenting ourselves as a government that is run on as a place where you’re going to be a host for a lot of the things that are being developed in your own city.
One of the things the VCs told me that I could do that I’ve been exploring already is to form a “Tech 20,” which would consist of 20 companies that would actually embed various apps developed in this city in their operations and try them out. Not necessarily enterprise-wide, but try them out, because it gives those enterprises two things they need.
One is the live experience they need of actually being in a working enterprise, whether it’s a bank or city government, and two it gives them the credibility of being able to say, ‘Hey, we’ve got this installed at the city government and they’ve got this many taxpayers or employees or traffic.’
We’re not even at that stage where we’re letting those apps to be tried because there’s a lot of old-fashioned technology. There’s been a lack of willingness to invest and a lack of courage about saying we’ll try stuff even in a corner of city government.
I’d like to see these hackathons – they’re not the answer to everything – but I’d like to see them going on every month. This month it’s traffic, next month it might be how you sign up for swimming lessons, the month after that it could be something entirely different that has to do with our payroll system.
The modernization of government is a priority for me, not just so I can go around and boast and brag but also it gives us much better customer service.
At Rogers we thought customers would be unhappy that they’d have to go and do their own thing, but they were thrilled. They could do it at 2:30 in the morning or five times a day if that’s what they wanted to do. It could also be hugely cost saving for us.