Digital strategy coming later this year: Paradis

The strategy will be released “later this year,” he told hundreds of businessmen, software developers and investors in Stratford, Ont.

At the same time, he also made it clear that the government will not bear the entire burden of ensuring Canada is at the forefront of digital technologies.

Any digital economy strategy it will succeed only “if industry as well as federal and provincial governments work together,” he said.

The provinces need to make tomorrow’s skills a priority today in education system, he said, colleges and universities have to work more closely with private sector, industry must bring more early risk capital and support larger scale venture capital funds, and companies must use their enhanced access to broadband to support the shift to more mobile digitally connected economy.

“As a nation we need to take more risks, think more creatively and act more boldly to claim our place in the globally digital economy,” said Paradis.

Former Industry Minister Tony Clement first announced the Conservative government’s intention to create a national strategy in May, 2010.  At the time, he expected it would be done in 18 months.

However, the government then decided it had to fit a digital strategy in with its plans to liberalize telecommunications foreign ownership.

Clement said he was close to announcing the digital strategy last year, but then a federal election was called.

The only other noteworthy thing Paradis said in his speech is that the next round of consultation on the upcoming 700 MHz spectrum auction will start Wednesday, when carriers will lobby the government on the nitty-gritty of the auction itself.

Last month the government announced the overall framework of the auction – that the spectrum will be broken into a certain number of blocks – but the rules governing the auction still have to be set.

That includes setting any foreign ownership limits or Canadian control minimums of companies that want to bid, setting minimum opening bids, establishing how long each round of bidding will go on.

The Harper government has already said it will change the Telecommunications Act so foreign investors can own all of a carrier that has less than 10 per cent of the market.

Most importantly, this round of consulting will also deal with conditions licence winners have to fulfill. In the last auction, these conditions included an obligation of incumbent carriers to share space on their towers with new entrants, and, more crucially, to allow new entrants to roam on their networks.

Roaming is vital for new carriers – such as Public Mobile, Mobilicity and Wind Mobile – because as young companies their networks aren’t as extensive as those of BCE Inc.’s Bell Mobility, Telus Communications Co. and Rogers Communications Inc.

For the 2008 auction, Industry Canada left it open for the incumbents to negotiate roaming fees with the new entrants. Because most new entrants wanted access for their customers to compatible GSM wireless networks in the U.S., that meant negotiating with Rogers – which gave Rogers a hammer hold on pricing.

Just as importantly to the new entrants, Industry Canada didn’t put any conditions on the type of roaming incumbents could allow. That meant subscribers of new carriers have had to suffer so-called “hard handoffs” in the middle of a call if they are moving to a competitors’ network: the call is dropped. The subscriber has to re-dial to continue the call.

By contrast, a Bell [TSX: BCE] wireless subscriber can roam seamlessly on the Rogers  [TSX: RCI.B] network because the handoff is soft. Wind Mobile tried unsuccessfully to get the Canadian Radio-television and Telecommunications Commission (CRTC) to order Rogers to end hard hand-offs.The hard handoff is a significant advantage for the big three incumbent carriers and they are expected to fight hard to keep it.

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