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  • 1. Regulation of Internet Commerce Professor Michael Geist University of Ottawa January 18, 2008 The Network Economy: The Way Ahead http://sitt.ic.gc.ca Veena Rawat President, Communications Research Centre. Industry Canada
  • 2.
      • What happened in 1985 that we are still experiencing the effects of today?
      • What happened in 1989 that changed how information is shared?
      • How did the world change in 1993?
      • What ‘fruity’ Canadian innovation started a revolution in 1996?
    University of Ottawa 18.01.08 -
  • 3. RIM country Source: Research in Motion Press Releases, 2000-2007 Worldwide BlackBerry Subscriber Growth (2000-2007) millions University of Ottawa 18.01.08 -
  • 4. We are in the network economy
    • "Over the past number of years, the ground rules of the global economy have changed. It has been an important and exciting time, with advances in communications technology , reduced trade barriers and declining transportation costs, which have changed the world."
    • The Honourable James M. Flaherty, Minister of Finance,
    • Foreword to Advantage Canada: Building a Strong Economy for Canadians,
    • November 23, 2006
    University of Ottawa 18.01.08 -
  • 5. The world is going online Source: ITU, 2006, Internet World Statistics, January 11, 2007 Notes: Internet Users data 1991-2005 (ITU), 2006 estimate (Internet World Statistics) University of Ottawa 18.01.08 -
  • 6. Canadians are no exception: Demanding high-speed Source: CRTC, Telecommunications Monitoring Report (July 2006) Note: 2006-07 projections based on IC calculations, assumptions: CAGR Dial-up -22.6%, Total Internet subscribers +7.5%, No. of households 12.55M University of Ottawa 18.01.08 -
  • 7. So they can shop…
    • Internet sales in Canada are expected to grow to $76.6 billion in 2007
    • In 2006:
      • Online sales by private firms increased 42% to $46.5 billion
      • Online sales by the public sector increased 17% to $3.4 billion
      • More than one out of three retail firms with more than 100 employees conducted e-commerce sales
    Source: Survey of Electronic Commerce and Technology 2006, Daily, April 20, 2007, Statistics Canada *Projections based on Industry Canada estimates, CAGR=42.4% University of Ottawa 18.01.08 -
  • 8. Bank …
    • In 2006, more Canadians banked online (26%) than bank with a teller (23%)
    • (Ekos 2006)
    Source: EKOS 2006 University of Ottawa 18.01.08 -
  • 9. Seek news and information… Source: AC Nielsen, Internet Planner Study 2006 Top activities for online Canadians % of Internet users University of Ottawa 18.01.08 -
  • 10. Canadians think Government provides better customer service than some key sectors % of Canadians surveyed Source: Presentation “ Leadership in Customer Service: Delivering on the Promise” - Canada Report: “Key Findings Overview and Citizen Survey Data”, Accenture, June 2007 University of Ottawa 18.01.08 - And interact with government, all online 18 14 15 22 13 11 5 8 13 6 23 19 19 20 23 13 14 14 8 10 (Base: All Aged 18+) Utilities Mobile phone companies Retailers in town/city Airlines Neither Better Worse Net % 31 41 24 28 28 +7 +4 +10 -7 +14 Don’t know 4 6 21 9 20 Banks
  • 11. They even like to pay taxes online Source: Canada Revenue Agency, Tax Year 2006 – Preliminary as of June 2007 Millions Percent Tax returns filed electronically in Canada University of Ottawa 18.01.08 -
  • 12. Canada #1 in Government E-Payment Adoption
    • GEAR study measures the extent to which governments in 43 countries provide key payment services on electronic platforms – including internet-connected computer, mobile phone, or PDA
    • Countries were chosen to represent various regions, cultures, political systems and broad levels of economic development.
    • The selected countries account for approx. 83% of the total human population and 91% of global economic output.
    Government E-Payments Adoption Ranking (GEAR) “ Government E-Payment Adoptions Ranking”, Economist Intelligence Unit (sponsored by Visa), October 2007 (http://www.visa.com/gear) University of Ottawa 18.01.08 -
  • 13. Technology and the Internet are increasingly at the center of our business, social, and public networks ICTs Automotive and Manufacturing Retail / Service Industries Power / Electricity Water / Sewage Transportation Air Traffic Control Banking and Finance National Defence Healthcare Public Safety / Law Enforcement Education Biotech / Life Sciences Home / Work Oil and Gas University of Ottawa 18.01.08 -
  • 14. Empowering citizens, businesses and communities Skilled workers, entrepreneurs and informed citizens Productivity growth and improved standard of living Inclusive Society Innovative Economy Persons with disabilities Rural & Remote Seniors Aboriginal New immigrants Francophone Youth at risk SMEs Increased employment, higher incomes and economic growth Access to the Network Economy University of Ottawa 18.01.08 -
  • 15. Driving productivity improvements
    • Productivity is the most important determinant of a country’s standard of living – a highly productive economy creates more jobs and can pay high wages
    • Canada among top 4 nations in quality of life - UN Human Development Index (2007)
    • Approximately a quarter of Canada's productivity was due to ICT capital investment in 1995-2005 (based on numbers found at the OECD productivity database)
    *Real labour compensation per hour worked. Source: Statistics Canada Real Wage Rate* Labour Productivity Labour Productivity and Real Wage in the Canadian Business Sector, 1947-2007 (1997=100) … productivity growth is key to standard of living University of Ottawa 18.01.08 -
  • 16. And employment and economic growth…
    • Strong contributor to the Canadian economy:
      • 5.9% of GDP (2006)
      • 8% growth per year since 1997:
        • Compared to 3.4% for the economy
      • Sector has grown by 113% since 1997, three times as much as the Canadian economy (39%)
      • 39% of private sector R&D, outperforming all other sectors (2006)
    Source: ICT Branch, Industry Canada, October 2006 ICT sector outpaces growth of Canadian Economy Source: Canadian ICT Sector Profile, ICT Branch, Mar. 2007 Indexed Growth in GDP at Basic Prices for the ICT Sector and the Canadian Economy, 1997-2005 (1997=100) 100 120 140 160 180 200 220 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007Q1 Total ICT Sector Total Canadian GDP University of Ottawa 18.01.08 -
  • 17. Internet is where people post their thoughts, photos, stories and videos…
    • New gadgets allow people to enjoy media, gather information, and carry on communication anywhere
      • 88% of college students own cell phones
      • 81% own digital cameras
      • 63% own MP3 players
      • 55% own video cameras
      • 55% own laptops
      • 27% of college students own a PDA or Blackberry
      • 77% of college students play games online
    • Ordinary citizens have a chance to be publishers, movie makers, artists, song creators, and story tellers
      • 20% of online adults have online profiles
      • 37% have uploaded photos to the Internet
      • 22% have shared their own creations online, such as artwork, photos, stories, or videos
      • 14% have their own personal web page
    Source: PEW Internet presentation to University of North Florida, Homo Connectus: The impact of technology on people's everyday lives , November 5, 2007. University of Ottawa 18.01.08 -
  • 18. Creating online communities to share and evaluate information… University of Ottawa 18.01.08 - Source: PEW Internet presentation to University of North Florida, Homo Connectus: The impact of technology on people's everyday lives , November 5, 2007. All those content creators have an audience
    • 32% of adult Internet users have rated a person, product or service online
    • 13% have commented on videos online
  • 19. This new connectivity changes our relationship to information, to media, and to each other
    • Constant connectivity is expected to change our lives in the future.
    • Virtual worlds such as Second Life provide 3D online environment where users can go to play games, collaborate, or interact with information in new ways.
    University of Ottawa 18.01.08 -
    • Life changes due to development of online social networks
      • Volume of info grows
      • Velocity of info increases
      • Venues of intersecting with info and people multiply
      • Venturing for info changes ("search engine era")
      • Vigilance for info transforms ("continuous partial attention")
      • Variety and valence of info increases
      • Vetting of info becomes more social
      • Viewing of info is disaggregated and becomes more horizontal
      • Voting on and ventilating about info proliferates
      • InVention of info and the visibility of new creators is made easier
    Source: PEW Internet presentation to University of North Florida, Homo Connectus: The impact of technology on people's everyday lives , November 5, 2007.
  • 20. Some might say … Technology is taking over our lives
    • 28% of respondents spend less time communicating with friends, family and co-workers because of the time they typically spend on the Internet
    • Almost 75% agree they now shop differently
    • US users can’t go without the internet, cell phones, and television – in that order
    • Younger generation increasingly expects to be able to connect anywhere at any time
    • 20% admitted they have less sex because they use that time for being online
    Source: Based on results of JWT Sept 2007 survey (1,100 U.S. respondents aged 18 years and older), as quoted at businessshrink.com, marketingcharts.com, and blogs.knowxnews.com “ Not tonight, honey, I'm on the Internet” “ People told us how anxious, isolated and bored they felt when they are forced offline.” Ann Mack, Director of Trend Spotting, JWT, Sept 24, 2007, Business Shrink Article University of Ottawa 18.01.08 -
  • 21. Is this man cheating on his wife? Source: Online Wall Street Journal, http://online.wsj.com/public/article/SB118670164592393622.html August 10, 2007. A virtual affair? Janet Spielman Tenaj Jackalope Dutch Hoorenbeek Ric Hoogestraat Sue Hoogestraat Controlled by Married to Controlled by Married to They own two dogs, pay a mortgage together and spend hours shopping at the mall and taking long motorcycle rides. In May, they married in a small ceremony in a garden overlooking a pond. They never speak (other than through instant messages in Second Life) and have no plans to meet. “ Not exactly thrilled”. Mrs. Hoogestraat joined an online support group for spouses of obsessive online gamers called EverQuest Widows. University of Ottawa 18.01.08 -
  • 22. Technology will continue to advance
    • Computing power doubles every 18 months – Moore’s law
    • Storage power doubles every 12 months – disk law
    • Communications power doubles every 2-3 years with improvements in fiber optics and compression – Gilder’s law
    • Spectrum power is enhanced with efficiency improvements in spectrum allocation and use
    Access to anything, anywhere, anytime University of Ottawa 18.01.08 -
  • 23. Networks will continue their transition to an IP base Past Future Convergence = Complexity University of Ottawa 18.01.08 - Wireless PSTN Internet CATV VoIP Broadband VoD WWW, Corporate Intranets CDMA, GSM Wireless & Satellite Converged IP Network
  • 24. This will enable more choices The Consumer’s Revenge!
    • Top-down : What the network thinks you want, when they think you want it and in the format they want
      • TV content on cable, or over the air
      • Radio show on radio
      • Books in the bookstore or library
      • Snail mail rain or shine
      • Voice by monopoly phone provider
    • Choice : What you want, when you want it, from anywhere
      • All content and services available online: Music, Movies, TV Shows, Books, podcasts, Voice, TV, Radio…
      • Choice of receptors: Personal Computers, cell-phones, BlackBerry, iPods…
    University of Ottawa 18.01.08 -
  • 25. More connections
    • Ecosystem of the Internet
      • Radio-Frequency Identification (RFID) tags + Smart Computing
      • Wireless sensors
      • Personal Area Networks (PANs)
    Source: ITU, 2005 University of Ottawa 18.01.08 - Everything is Connected Economic System Producers & Suppliers Consumer Advocacy Groups R&D organizations Gov’t & Regulators International Agencies Lead Users Legal System Social System Ethics Internet of Things Human Body Internet Things Human Being RFID Nanotech Smart tech Wireless sensors Cable xDSL Satellite 2G mobile 3G+ mobile WiMAN WiLAN
  • 26. And more opportunities e-health e-government e-business e-content e-learning Broadband Platform for Innovation and Inclusion e-research e-meeting University of Ottawa 18.01.08 -
  • 27. However, with change comes challenges Individuals by income, education, and age Businesses large and small Regions urban and rural / remote Countries developed and developing Using ICT and Networks to Address Digital Divides… University of Ottawa 18.01.08 -
  • 28. In this time of change and challenges… What is the role for government? Deputy Minister Senior Associate Deputy Minister Competition Bureau Canada* Audit and Evaluation Branch Comptrollership and Administration Sector Corporate and Portfolio Office Communications and Marketing Branch Legal Services Industry Sector Regional Operations Sector Spectrum, Information Technologies and Telecommunications Sector Canadian Intellectual Property Office Small Business and Marketplace Services Sector Communications Research Centre Canada Human Resources Branch Office of Consumer Affairs Science and Innovation Sector Strategic Policy Sector MINISTER Minister (FedNor) National Science Advisor Parliamentary Secretary Secretary of State (Small Business and Tourism) Industry Portfolio * The Commissioner of Competition reports to the Deputy Minister for administrative and financial purposes and reports to Parliament via the Minister in respect of the Bureau’s independent law enforcement role. University of Ottawa 18.01.08 - Department Structure
  • 29. Laying the foundation
    • Canada’s ICT Legislative Framework
      • Telecommunications Act (1993)
      • Broadcasting Act (1991)
      • Radiocommunication Act (1989)
      • Competition Act (1985)
      • Copyright Act (1985)
      • Investment Canada Act (1985)
      • Personal Information Protection and Electronic Document Act (PIPEDA)
      • Industry Canada Act
      • Emergency Management Act
      • Do Not Call Act (CRTC, National DNCL)
    University of Ottawa 18.01.08 - Creating the frameworks, policies, regulations and programs to ensure a fair, competitive and efficient market place – to foster a growing, competitive, knowledge-based economy
  • 30. We started early
    • Getting Canadians on-line:
    • Based on recommendations of the Information Highway Advisory Council (1994)
    • Connecting Canadians (1998-2002)
      • Announced in Budget 1998
      • 6 Priority “Pillars”:
        • Canada Online
        • Smart Communities
        • Canadian Content Online
        • Electronic commerce
        • Canadian Governments Online
        • Connect Canada to the World
    • Government On-Line (1999)
    Our Vision “Canada the most connected nation in the world” University of Ottawa 18.01.08 -
  • 31.
    • 100% of schools and libraries connected by 1999
    • Over 800,000 refurbished computers given to schools (as of June 2007)
    • Established approximately 4,000 Internet access sites
    • CA*net 4: the world’s first national optical research and education network
    • 75% of households have internet access (IPSOS-Reid 2006) and 85% firms use the Internet (SECT 2006)
    • Among the top rates of broadband penetration (OECD 2006)
    • #1 in Government Online (GOL) (Accenture 2001, 2002, 2003, 2004, 2005)
    • Canada #1 in E-Payment Adoption Rankings (“Government E-Payment Adoptions Ranking”, Economist Intelligence Unit (sponsored by Visa), October 2007 (http://www.visa.com/gear)
    Our efforts produced success Canada has become an e-Society University of Ottawa 18.01.08 -
  • 32. And our programs and policies continue to evolve
    • National Broadband Task Force (2001)
    • Broadband (BRAND) Program (2003)
    • National Satellite Initiative
    • SPAM Task Force (2004-2005)
    • Telecom Policy Review (2005)
    • Continued Deregulation via Policy Direction, VoIP Decision, Forbearance (2006)
    • New Spectrum Policy Framework (2007)
    University of Ottawa 18.01.08 -
  • 33. But challenges remain: broadband access Source: Industry Canada, Broadband Office, May 2006 It is estimated that approximately 2000 communities remain without broadband University of Ottawa 18.01.08 - Remaining unserved Broadband Pilot Program National Satellite Initiative Federal/Provincial/Territorial Strategic Infrastructure Fund Initiative Provincial/Territorial Initiatives Anticipated Marketplace Initiatives Marketplace Roll-outs since 2000 Served Pre-200
  • 34. University of Ottawa 18.01.08 - Broadband Access Uneven 2004 => 63% => 37% 2007
  • 35. Rural Broadband: University of Ottawa 18.01.08 - - Cable-modem / ADSL MAC Long round-trip delays - WiFi hot-spots in ISM bands - Higher power, lower frequency broadband access system 30 km 23 km 16 km QPSK 16-QAM 64-QAM PHY Adaptive modulation - Medium power wireless systems 5 km
  • 36. Household reach by technologies (“last mile”) University of Ottawa 18.01.08 - Satellite Terrestrial Wireless ADSL, Cable, ISM and UNII Wireless and Optical Fiber www.crc.ca New wireless 0.4 M 0.8 M 1.2 M 1.6 M 2.0 M 0.0 M Population per density bin (Million) USA (scaled) Canada
  • 37. We recognized the importance of broadband networks… Canada: BB penetration (per 100 inhabitants, Dec. 2006) 23.8; population density (2005) 3 inhabitants/sqkm Japan: BB penetration (per 100 inhabitants, Dec. 2006) 20.2; population density (2005) 338 inhabitants/sqkm Source : OECD University of Ottawa 18.01.08 -
  • 38. Challenge: ICT skills
    • Increased demand and upward pressure on salaries indicate tight labour market with insufficient supply of skilled labour
      • Between Fall 2004 and 2005 a 21% drop in undergraduate enrolment
    Sources: Statistics Canada (June 2007); Computing Research Association (May 2007) Demand Supply University of Ottawa 18.01.08 -
  • 39. Challenge: Use Source : McKeown, Noce and Czerny, Factors Associated with Internet Use: Does Rurality Matter?, Statistics Canada Rural and Small Town Canada Analysis Bulletin, September 2007. Individuals that are older, with lower levels of education and with lower incomes are less likely to use the Internet % of Canadian adults using Internet from any location University of Ottawa 18.01.08 -
    • age, income and education are correlated with Internet use.
    • 68% of adult Canadians used the Internet in 2005 for personal non-business reasons - only 58% of rural and small town residents accessed the Internet, well below national average.
    Language of Interview
  • 40. Challenge: Illegal and offensive content
    • Child pornography, online luring, child prostitution, child sex tourism and other activities are of growing concern
    • Cyberwise Strategy
      • Agenda for confronting illegal and offensive content
      • Multi-stakeholder partnership
    • Cybertip.ca
      • Initiated by Child Find Manitoba and Industry Canada
      • Canada's national tipline
      • Analyzing tips from public
      • Referrals to law enforcement
      • Transferred to Public Safety Canada
    University of Ottawa 18.01.08 -
  • 41. Challenge: Content and culture
    • Emerging digital copyright issues:
      • Digital Rights Management (DRM)
      • ISP liability
      • Fair usage
    • Advancing technology is threatening existing market:
      • Satellite TV
        • Black Market/Grey Market
        • Access to foreign and ethnic programming
      • Satellite Radio
      • Internet/Multimedia - movies, music, video on demand, iPod
    University of Ottawa 18.01.08 -
  • 42. Challenge: Spectrum availability
    • Spectrum challenges are now global
      • Global and regional harmonization
        • Technology neutrality
        • Licence-exempt spectrum and standards
        • Public safety and security
      • Implications
        • Greater effort required to build consensus
        • Nations can no longer operate in isolation
        • Regional (minimum) – Global (desired)
    • New Spectrum
      • AWS
      • 700MHz
      • 2.5GHz
      • Satellites
      • DAB/New Media
      • UHF White spaces
      • UWB
    University of Ottawa 18.01.08 - Spectrum Policy Framework To maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum resource The next wave of innovation depends on spectrum. Minister of Industry, June 2007 Canadian Telecom Summit
  • 43.
    • National security
      • National Cyber Security Secretariat
    • Fighting crime
      • Lawful Access
    • Critical infrastructure protection
      • Canadian Telecommunications Cyber Protection Working Group
    • Cross jurisdictional coordination and cooperation
      • Security and Prosperity Partnership
      • APEC, G8 and OECD
    Challenge: Cyber security University of Ottawa 18.01.08 -
  • 44.
    • Historic events - major accidents, acts of terrorism and natural disasters - have highlighted the importance of communications:
      • Eastern Canada Ice Storm (1998)
      • 9/11 (2001)
      • Great Blackout (2003)
      • Asian Tsunami (2004)
      • Hurricane Katrina (2005)
    • Today effective communications is critical for public safety and national security/emergency preparedness agencies to communicate in planned and unplanned situations and emergencies.
    Challenge: Public safety and security University of Ottawa 18.01.08 -
  • 45. Challenge: Emergency telecommunications preparedness and response
    • Emergency telecommunications plans
    • Facilitating movement of telecommunications equipment and services during emergencies
    • National Emergency Telecommunications Services
      • Priority Access for Dialing
      • Wireless Priority Service
      • Development of a national public alerting service
      • E911
    • Meeting emergency spectrum demand
      • 2010 Vancouver Olympics
      • Interoperability
    University of Ottawa 18.01.08 -
  • 46.
    • Communications Research Centre Canada (CRC) and Industry Canada’s Protocol Lab
    • Provide engineering analysis and scientific research:
      • Vulnerability analysis
      • Investigate and analyze new technologies
        • e.g. VoIP, software-defined radio, WiMax, Geogating, Multimedia, encryption, etc.
      • Potential impact on standards, regulations and cyber security
      • R&D on network security, public safety and defense communications
    Challenge: Research and Development University of Ottawa 18.01.08 -
  • 47. The network economy is critical to our global competitiveness
    • There are many challenges on the road to the true network economy
    • Canada took an early lead, but we must continue to keep the vision alive
    • Need to ensure we engage all stakeholders: citizens, government, business, and academia
    University of Ottawa 18.01.08 - ...and young graduates come and join us.
  • 48. http://sitt.ic.gc.ca Industry Canada www.ic.gc.ca Government of Canada www.gc.ca Canada