February 2010 Archives

The internet has become a vital part of our infrastructure and it is, in many ways, as indispensable as traditional utilities like electricity, telephone service and natural gas. It's as essential to our world today as highways, water mains, and sewers.

We don't, as a rule, build important infrastructure without considerable planning, policy and debate - but none of that happened with the internet.

Unlike our utilities, or our physical infrastructure components like highways and sewer systems, the internet, in effect, came in the back door as an overlay on top of existing communications infrastructure. In doing so, it by-passed traditional planning processes.

Many nations today are now developing and implementing national digital strategies that they hope will shape the future of the internet for the benefit of their nations and citizens.

Australia, France, Germany, Great Britain and New Zealand are among the countries that have already released digital strategies. Indeed, New Zealand released the second version of its strategy back in 2008. There've been discussions in Canada amongst various groups comprised of government, public agencies and the private sector, but we're still far from formulating a national digital strategy of our own that protects and promotes our nation and its people in the digital age.

The scope of the national digital strategies developed abroad is quite extensive. What's generally not included, though, is a broader look at digital infrastructure and common services.  Like many countries, we've become dependent on a lot of services over which we have little or no national control. However, just because we can't control them doesn't mean that others can't.   Often, unbeknownst to us, our digital activities expose us to powerful foreign legislation like the USA PATRIOT Act and its far-reaching powers.

In the physical world, when we cross the border into another country, we understand - or should understand - that we are now subject to the laws of that country. What many may not realize, though, is that our digital transactions and data cross borders with great frequency - and we're often not even aware of it.

It is often very difficult or impossible to determine whether our digital activities are wholly contained within Canada or not. It might seem natural to conclude that a transaction between a Canadian consumer and a Canadian company, or between two Canadian companies, might be wholly under the jurisdiction - and protection - of Canadian law, but is that true?  What if the website is hosted on a server located in the U.S.?  What if payment is made through American-owned PayPal? Even a seemingly insignificant detail such as an e-mail confirmation of a transaction that is sent to a Gmail or Hotmail account takes the transaction information through foreign-owned servers and, likely, into the U.S. or elsewhere beyond our borders.

Most online Canadians use foreign-owned services including Google, YouTube, Skype, MSN Messenger, Twitter and Facebook to name but a few. And while we may occasionally consider whether we want these companies collecting data about what we say and do online, we seldom, if ever, consider the broader implications of that data collection. Collectively, it paints a detailed picture of individual Canadians - and when that data resides beyond our borders, it is also largely beyond our control and potentially subject to intrusive foreign laws.

Increasingly, too, Canadian companies are building services on scalable cloud-computing platforms offered by foreign-controlled companies including IBM, Microsoft and Amazon and these are usually also hosted beyond our borders. Many companies also use online software services provided by third parties and have no idea where their data actually resides.

We're effectively outsourcing much of the digital infrastructure of our online social and economic world and, when you do that, you can lose control. While we can control some of what happens within our borders - for example, Canadian privacy laws did cause Facebook to change how it operates in Canada - we can't control what occurs beyond our borders.

There's an economic impact to using foreign-owned services, too.  Money flows out of the Canadian economy when we do this.  Genesis may have been "Selling England by the Pound" but we're selling Canada bit by bit.

This isn't a plea for regulatory intervention.  However, as part of our national digital strategy, we do need to consider our digital sovereignty. Educating consumers and companies of the risks associated with the data that transcends our borders should be an important consideration.  The responsibility for the privacy and security of our data for government, the private sector and individuals, can't be ignored. We need to ensure that adequate infrastructure services that are wholly contained within our Canadian digital borders are available.  Only by doing this can we ensure our security, autonomy and sovereignty in a digital world, and keep our dollars working in our domestic economy.

[Update: The Mark published a condensed version of this on February 26, 2010 at http://themarknews.com/articles/1019-our-endangered-digital-sovereignty]

[This commentary was also published at Cartt.ca]

If the internet had been something that was created from scratch, rather than a rapid and almost spontaneous evolution of technology and networks, governments around the world would have played a much bigger role in its development and deployment.  It likely, too, would have been much less the global network that it is today and much more a collection of inter-connected national networks.  Controlled cross-border exchange of information, entertainment and commerce would likely have been the norm. And... we'd have an online media world that closely resembled the traditional, tightly controlled one.

In effect, though, the internet arrived uninvited and, for some, at least from a video content point of view, remains an unwelcome guest.  Nonetheless, it's already permanently re-shaping the way we distribute and consume media.

English Canada has a significant cultural affinity to the United States and we have consumed a diet that has consisted of a lot of American fare for more than 50 years.  Of late though, on all fronts, from our Canadian English-language broadcasters through to new digital distribution channels like iTunes and YouTube, we've super-sized our consumption of foreign content.

In the conventional system, Canadian content requirements ensure, at least to a degree, that Canadian producers and talent have a role to play and a vehicle to tell Canadian stories to Canada, and, on a good day, through foreign sales, to other parts of the world. There are, however, no corresponding requirements when it comes to alternative distribution channels.  Across all distribution channels, Canadian audiences are increasingly turning their attention to foreign content (primarily of U.S. origin) and we face an increasing attention trade deficit.  We're accustomed to thinking of trade deficits mainly in economic terms, and that's true here, but our attention trade deficit also comes with an undeniable cultural impact.

When broadcaster dollars go to buying foreign content, that takes money out of the country - and doesn't help our domestic creative industries any.  But it is far worse in the online world.  When Canadians acquire foreign-produced content directly from foreign-owned content aggregators like Apple, Google, Amazon, Microsoft and others, there's no Canadian middleman involved.

When fees are involved, they go to the aggregator.  When the content is ad-supported, Canadian advertisers increasingly are following Canadian eyeballs and buying space on these foreign sites.  The fragile Canadian content ecosystem is by-passed and, other than traffic flowing across our network plumbing, we're passive observers to the whole exchange. No Canadian company profits from the transaction, the government receives no tax revenue, and dollars flow out of the country.  These lost dollars can't be channelled back into our content creation industries - and our ability to tell culturally relevant stories is diminished.

Foreign entities, of course, have no obligation - and, arguably, little interest - in Canadian content, and, while our independent production model has been a great success, the result has been that few Canadian content producers have the scale or catalogue depth to attract the interest of foreign players.  On the home front, we have very few Canadian content marketplaces or aggregators to showcase Canadian content to Canadians or the world.

Many nations today are now developing national digital strategies that - they hope - will shape the future of the internet in many ways.  Australia, France, Germany, Great Britain are among the countries that have already released digital strategies.  Even tiny New Zealand released the second version of its strategy in 2008.  

The scope of such strategies is broad.  Content, though, does not have a significant presence in most of these strategies - and that's actually not that surprising.  While none of these countries is immune to the unprecedented influx of foreign content that the internet has made possible, these countries are, with the exception of New Zealand, the dominant economic power within their primary spoken language within their geographic region. Germany and France, in particular, enjoy the advantage of limited content in German or French that is foreign-produced. 

Our content funding today is, in large part, tied to the old broadcast-centric system and this doesn't encourage development in new forms of entertainment that exploit new capabilities on new distribution channels.  The new Canada Media Fund will address this to some degree but we don't know yet what its newly formed policies (or their impact) will be.

We can't - and shouldn't - try to force Canadian content down consumers' throats.  But we can - and should - take active steps to ensure that there is a viable Canadian digital content eco-system.  That includes Canadian-owned marketplaces and aggregators, both to showcase Canadian content but also to give us an economic stake in the game regardless of whose content is being consumed.

This isn't a call for regulatory intervention, but, as part of our national digital strategy, we do need to address this problem.  Losing the battle for attention from Canadian eyeballs may happen anyway, but if we don't act soon to offer alternatives to Canadian consumers, it will be a virtual certainty.  That, compounded by a lack of capabilities to help Canadian content reach a global audience, could be the death knell of our creative industries.