2 Sep 2008
0 CommentsPublic Policy for the Digital Age
With the imminent federal election call in Canada, it seems timely to start a discussion on public policy principles that our governments (federal and provincial) should be considering. From the context of the information technology industry (web, mobile, digital media, etc.), why is this important?
Firstly, as more and more traditional manufacturing jobs migrate to the Pearl River Delta, the knowledge-based industries, given the right macroeconomic environment, could well be one of our best job growth options. By “macroeconomic environment”, we are referring to the complex web of legislation providing fair regulation, securities legislation and tax code that better encourages the growth of a globally competitive IT industry.
Secondly, it should be noted that the Silicon Valley, where most of the IT industry originated, has not historically been that engaged with government, policy or lobbying. In fact, many in the technology industry have proudly worn the badge of libertarianism, erroneously believing they represent a future that has transcended the need for government intervention or regulation. In fact, all the time, these people may have been simply living in a sheltered world created, ironically and in large measure, by big government and the military industrial complex. The Defense Advanced Research Projects Agency (DARPA) of the US Department of Defense, funded massive research during the 1960’s and 1970’s that led directly to the creation of the modern internet. As it happens, the very openness (if not the counter-cultural flavour) of today’s web, arose directly from creating a redundant fabric that would potentially survive nuclear attack.
Thirdly, and not to overgeneralize, many elected officials lack proficiency in technology and the future of the digital and wireless economy to make good policy decisions. Rather than being a criticism, it’s just a fact of life. In that environment, it behooves technology industry leaders to work to inform our government representatives, and the civil service, on important matters.
A key complicating factor is that the political process has a tendency to pander to public opinion rather than cold harsh economic realities. Spending tens or even hundreds of millions trying to subsidize dying industries is like trying to extend the life of the proverbial buggy whip. Spending money on programs to lessen the impact of social and economic change is quite another story. But, even then, governments generally don’t excel at picking winners and losers. Generally, it is better to simply level the playing field and stand back to let the market perform.
Accordingly, over the next few weeks, we’ll choose a few topics that have direct relevance to our digital future and, quite likely, our overall prosperity in the coming decades:
- “Why Bill C-61 is a Bad Idea for Canada’s Digital Economy”,
- “Taxing Talent in Startups”,
- “Startup Investment Discouraged by Tax Laws” and
- “The Sorry State of Mobile Regulation in Canada
Stay tuned. We encourage your input on any issue we discuss. If you feel there are other key issues to the future of our knowledge based economy, then, by all means, include that in comments as well.
Jim Balsillie
Mike Lazaridis
Reed Hastings
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Speaking of trust, a week ago a good friend lent me a fascinating book called 
Can We Trust Their Claims of Open?
Jonathan and Terry with Michael Chong, MP
In a blog post back in April 
3 Sep 2008
0 CommentsDigital Policy #1: Why Bill C-61 Is a Bad Idea for Canada’s Digital Economy
As we approach a Canadian Federal Election, the long simmering issue of proposed Bill C-61 copyright “reform” (often known as Canada’s even more onerous Digital Millenium Copyright Act, patterned after its US counterpart) has surfaced as a potentially big election issue, at least among those who participate in our digital economy. This is the first in a series of posts around public policy for the digital age.
A recent blog post by my colleague Alec Saunders, “Why I will be voting against Stephen Harper’s Conservatives when an election is called”, reminded me of some of the key reasons why this represents such bad public policy. In Alec’s words, “Bill C-61 would make most ordinary Canadian families into criminals”, because the law’s focus is so askew that ordinary consumer actions would create infringement. Furthermore, the law as drafted gives too much power to the industry to levy fines in ways that short change our cherished judicial process.
Alec isn’t alone. A good example of the grassroots protest is the Facebook Group, “Fair Copyright for Canada”, created by noted Canadian internet legal authority Michael Geist. Notably, this group has grown quickly to 92 000 members, unprecedented for a legal topic as arcane as Copyright. Clearly, this legislation has struck a nerve, and it should be noted that many of these group members are quite influential in the digital media and computer industry.
I have an even more fundamental objection. Bill C-61’s provision which attempts to stop people reverse engineering Digital Rights Management measures, quoting from the Draft legislation, prohibits any “… technological measure to descramble a scrambled work or decrypt an encrypted work or to otherwise avoid, bypass, remove, deactivate or impair the technological measure, unless done with the authority of the copyright owner”. By way of analogy, this is like criminalizing locksmiths.
There is no question that such legislation would put a chill on large segments of the software and digital media industry in Canada, simply because it makes innovation and new business models more difficult to develop. An example is that antivirus/security companies often have to reverse engineer security systems to build their perfectly legal product. Make no mistake, those jobs in digital media will be created. The only question is whether, thanks to a lasting chill from Bill C-61, they will be in Canada or elsewhere in our increasingly globalized world.
My message to legislators is that this bill appears woefully unbalanced. I believe there needs to be Copyright legislation. But, like anything else, a balance needs to be struck between technological and business model innovation and the need to protect the incumbent industry. My concern is that our legislators likely lack the detailed technical and economic knowledge of how the digital and internet economies actually function. My suggestion to those in leadership positions in the new economy is to speak up before it is too late. A big slice of our future prosperity is certainly worth lobbying to address the serious flaws in this draft legislation.