A few days ago I saw an advertisement for Bell’s new online video store, so I checked it out, then began wondering: since Bell has its own bandwidth hogging service in its Bell Video Store, has it considered the impact of such an offering on what is becoming a congested web? Afterall, it is so congested that as an ISP, it has to traffic shape, specifically bandwidth throttle to keep the traffic flowing.
This reported congestion sparks continuous debate in Canada over the practice of traffic shaping, which both Bell and Rogers practice. Meanwhile, our counterparts in the United States have already moved to ban “discriminatory practices by ISPs” by instituting the Internet Freedom Preservation Act of 2008.
In the United States there’s an understanding that market forces are not enough to protect the consumer in that delicate balance between corporate and consumer rights. And it is unfortunate that corporations are shortsighted enough to bite the informed hands feeding corporate coffers, thus necessitating government intervention.
Future -focused Countries Like Japan Lead the Way
It is that short-term thinking among ISPs that justifies arbitrary traffic shaping measures. ISPs claiming that a few users monopolize broadband network capacity by sharing large files like videos, seem to suggest that expanding those broadband networks to allow people to further take advantage of the Internet is out of the question. So again, it’s interesting that Bell would offer its own video download service online.
While Japan is smaller than Canada, the New York Times reported last year that Japanese broadband users can enjoy the Internet at nearly 30 times the speed of a typical DSL line.
The government chipped in with tax breaks and other incentives to support fibre optic networks in Japan, and though some questioned the cost-effectiveness of supplying huge bandwidths of 50 Gigs or more, the focus is on long-term gains rather than short-term costs.
Economists who toot a knowledge-based economy as replacement for a declining manufacturing sector might agree that laying the groundwork for future innovation ideally begins today. Statistics Canada data for 2007 indicates that 50 per cent of Canadians use the Internet for educational purposes as opposed to the 20 percent who download (ex. movies) and upload content (ex. blogging or photo sharing). Both categories are growing, however, and visual content will be as instrumental in teaching as it will be for leisure entertainment. It is not an ISP’s place to judge which is more important, given that both categories draw people to become broadband subscribers.
The Japanese have the foresight to invest in fibre now, while we sit wringing our hands because profits will be delayed and uncertain. They expect to thrive on future alliances, and on applications that will combine stability and reliability. Internet phone (VOIP) and Internet TV, video conferencing and medical applications are just some of the offerings these leaders expect to exploit as a result of early investment.
In fact, with such investments Bell’s video offering need not be downloaded at all. Customers could pay-per-view for high quality online video streams. Besides, it would be a sound environmental strategy, precluding the need for additional storage devices on the consumer end. As a result, ISPs would find the situation opens up more advertising opportunities, which would help to offset costs.
Partnering with Government to Reduce Costs
Since cost is a big factor in network expenditures, as in the past, government alliances might prove fruitful. After all, that’s how Bell created its network initially.
As roads and other public infrastructure deteriorate across Ontario and Quebec — Bell’s prime territory — government will have to carry out repairs, and with that comes the opportunity for partnerships. In fact, as of last month, the Federal and Provincial governments committed to investing $9.3 billion in Ontario infrastructure over the next seven years, including expanding rural broadband coverage in southern and eastern Ontario. This is a rare opportunity for telecommunications companies to get in on the ground floor and strike a partnership to upgrade broadband networks wherever the government carries out its own infrastructure updates.
Federal Infrastructure minister Lawrence Cannon indicates that under the “Building Canada” plan $33 billion will be invested in towns and cities over the next seven years. This allotment comes after a report by the Federation of Canadian Municipalities (FCM) highlighted the dire state of infrastructure in Canadian cities, but it is only a start. FCM suggests $123 billion will be required to correct years of infrastructure neglect.
The provincial (Ontario) government, under the Investing in Ontario Act, also plans to direct a portion of any budget surplus to infrastructure. So rather than complaining about the costs, telecommunications companies should jump at synergistic opportunities to reduce those costs, and prime Canada to remain on the technological cutting edge, as it was with Alexander Graham Bell’s invention of the telephone.
Can Bell rise to the challenge? Well, with its new debt structure there’s a fear that the infrastructure may be patched but never superiorly crafted to create or face the future. So it would be nice to see some Asian inspiration take hold of the 127-year old company so that it may position itself to withstand another 127 years, and more.
What are Others Doing to Place Fibre?
Fibre optic networks, though costly, can be and are often created with government partnerships. Innovative methods allow for fibre optic installation in sewer lines and low-pressure gas mains. According to information on the city of Ottawa’s web site, in the United States, cities such as Dallas, Houston, Pittsberg, Indianapolis and Albuquerque have been building fibre optic networks by pulling “dark fibre via the sewer into buildings, or for city street construction, and make the dark fibre available to other carriers.” In such cases, not just one carrier benefits, many do, in addition to consumers and other stakeholders.
Albuquerque’s Public Works director Larry Blair lauds the system as one that allows the city to make money: “CityNet (CityNet Telecommunications Inc. of Maryland USA) pays the city a percentage of its gross revenue generated from leasing the network to carriers and broadband service providers.” That revenue was possible because of a progressive mindset.
Closer to home, both Toronto and Mississauga have successfully worked with the now defunct Metropolitan Area Network (MAN) provider Stream Intelligent Networks Corp. to provide new high-speed network access.
Also, before cable trenches are filled, paved, or sodded, telecommunications providers like Bell ideally could to get in there and place equipment. It would also be convenient for local communities since this strategy minimizes disruptions and even air pollution. The new subdivisions and condo’s popping up also represent opportunities for duct placement and the like. So whether partnering to use existing infrastructure, or to capitalize on new development, strategic opportunities abound.
In the meantime, it’s unfortunate that we must watch ISPs, like Bell, dictate acceptable online consumer behaviour by throttling and otherwise shaping Internet access while at the same time expecting to profit from Internet video businesses.
The Internet is Expected to Shape our Future
Bell’s video website indicates that you can download movies anytime, all the time; but are downloads from bellvideostore.ca exempt from throttling? Or is the Canadian Association of Internet Providers and the other complainants correct in asserting that a certain selfishness is inherent in Bell’s traffic shaping policies?
According to bloggers on Internet law expert Michael Geist’s web site, the Competition Bureau stated: “Bell’s network management practices appear to be non-discriminatory, in that they are being applied at a network-wide level to both Bell’s own retail service and the service of all its wholesale customers.” That would mean that downloading a video from Bell’s online video store could take much longer than necessary when requested during peak periods. That’s enough to make you want to take a trip to Blockbuster, where you can immediately pick up a movie and head home to watch it.
Bell’s not the only one to offer Internet movie downloads, which I imagine is part of the leading-edge entertainment strategy former CEO Michael Sabia once spoke of. Many other services, such as Google’s search engine, thrive on the Internet. As a result, limiting the Internet stifles innovation, which is the key to small business start-ups, and consequently a healthy economy.
Toronto Star columnist David Crane wrote that the future of the Internet will be “a world of convergence of voice, data and video into a single Internet-based system.” He, like the Japanese, imagines the Internet will transform how we deliver and monitor health services, energy and entertainment.
“But from an economic point of view, it should mean much greater opportunities for creativity and innovation, enabling businesses, universities and public institutions to collaborate in the commercialization of new knowledge, drawing on the best ideas from all over the world and advancing them faster in a world of open innovation.”
Canadians are wise to Crane’s convergence suggestions, too. Statistics Canada data shows that in 2007, 88 per cent of people who accessed the Internet did so via high-speed connections. That increase in broadband usage lead to more downloads of music, movies and watching television. So one might even say, if you build a strong network, usage will come. However, if you don’t build it, Generation Y will not be as productive as it can be.
Similarly, with an estimated 50 per cent of the labour force involved in information production or distribution, technology appears to be the glue binding us across industries and locales. And this might be one reason Google expounds the benefits of net neutrality in its letter to the CRTC.
Hopefully the government will appear from behind its free-market screens and legislate for our future if shortsightedness begins to threaten the robustness of that future. Focussing on that dynamic future, partnerships between government and the telecommunications industry make sense. It would help us improve Internet accessibility and functionality to the point where companies prosper from consumer web freedom rather than incense customers with restrictions.