Canada's Path to Digital Competitiveness

Jim Prentice, Canada's new industry minister, has been on the job for less than a week, yet his appointment has already sent a buzz through the business community. With a member of Prime Minister Stephen Harper's inner circle now at the helm, promoting Canada's global economic competitiveness promises to become a core priority on the government's fall agenda.

While some political commentators maintain that the issue rarely translates into voter support, the good news for Prentice is that reforms focusing on digital issues represent both good policy and smart politics. By prioritizing three issues -- communication, copyright, and consumer confidence -- he has the opportunity to establish a forward-looking framework that can serve as a model for other countries and provide a payoff at the ballot box.

Maxime Bernier, the former industry minister, rightly identified communications as a foundational issue for Canadian digital competitiveness. Over the past 18 months, Bernier tabbed telecommunications as his chief concern, ordering the Canadian Radio-television and Telecommunications Commission (CRTC) to deregulate local phone markets and to emphasize a hands-off approach.

Catching up on Net connectivity

Analysts are divided on whether the deregulation will result in reduced prices for consumers; however, there is near-universal agreement that deregulation alone is not enough. Plans for a new consumer complaints commissioner and the do-not-call registry should be placed on the fast track, while the minister should heed recent advice from Corus Entertainment, one of Canada's leading media companies, by establishing a task force to examine network neutrality. Moreover, the spectrum auction, which can open the door to greater competition and lower prices, provided that Ottawa reserves space for new entrants, should proceed as planned.

Looking further ahead, there will be another spectrum auction once Canada's broadcasters complete the transition from analog to digital, freeing up the analog spectrum for alternate uses. While Canada has lagged behind most of the industrial world in the wireless sector, Prentice can propel it ahead by mandating that some of that spectrum feature "open access" requirements that would spur innovation and empower consumers.

Moreover, with recent news that the Australian government plans to implement a national broadband network that will provide coverage to 99 per cent of its population by the end of 2008, Canada is facing the prospect of playing catch-up on the Internet connectivity front. A long overdue Canadian broadband strategy to ensure that all Canadian communities have access to affordable high-speed Internet connectivity would prove popular with voters and strengthen Canada's position in the digital economy.

Copyright reform

After years of missed deadlines, the stars may have finally aligned for Canadian copyright reform. With a strong new industry minister, a former industry minister (David Emerson) chairing the powerful cabinet economic committee, a fresh face at Canadian Heritage in new minister Josée Verner, and a government that only two months ago met U.S. demands for movie piracy legislation, Canada is now poised to introduce reforms that meet domestic needs and generate popular support.

In the short term, that means blocking the application of the private copying levy to iPods and SD cards, which can be implemented without the need for new legislation and would bring cheer to Canadian retailers and consumers.

Longer term, a new legislative package could contain a series of measures focused on restoring balance to Canadian copyright law, emboldening a new generation of Canadian creators and capturing the public's attention. These include provisions that formally legalize recording television shows (time shifting), permit personal backup copies of CDs and DVDs (format shifting), expand fair dealing to allow for innovative new business models, eliminate the private copying levy and establish a close link between legal protection for copy-control technologies and actual copyright infringement.

Making a safety net

Bernier puzzlingly ignored promoting consumer confidence in the digital economy. With mounting concern over spam, spyware and identity theft, Canada's failure to act places us in a distinct minority of countries and threatens consumer acceptance of electronic services such as e-banking and e-commerce. The obvious solution -- supported in 2005 by Emerson -- is a legislative package targeting Internet harms that would likely receive all-party support as few politicians would stand in the way of anti-spam legislation.

Addressing consumer confidence also means giving Canadians the tools to protect themselves against identity theft and misuse of their personal information. Last spring, a House of Commons committee recommended creating a mandatory security breach notification system that would require organizations to report security breaches to the privacy commissioner. The government has been silent on its planned response, but Prentice should seize the opportunity by implementing the recommendation.

The government sent an important signal last week that industrial policy will garner greater attention in the months ahead. Digital economic issues should form a key part of that initiative as aligning smart policies and politics may be both easily said and done.

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• CanCon Adapts to a Wild New Media World
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• A Net Abuzz with Activism
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