Could CANARIE fly on its own?

While writing the last post on the potential termination of funding for CANARIE, I got in touch with someone who I have recently come to know and have a great deal of respect for, Bill St. Arnaud. Bill’s important to the CANARIE story because he was Chief Research Officer with it for fifteen years before starting off on new adventures in early 2010.

After reading CANARIE’s annual reports for the last decade and the Government’s budget for 2011-12 tabled last week in Parliament that signals the end of CANARIE as a government funded initiative, I got in touch with Bill to see if I was understanding things correctly. Here’s a brief reprisal of the email conversation we had:

DW:

Dear Bill, I was wondering if you could please help me make some sense of some numbers related to Canarie that I’ve recently come across in the Governments Budget for the upcoming year? I see that they refer to the ‘sunset’ of $31m in funding to Canarie last year, and zero allocated for the upcoming year. Surely that doesn’t mean that Canarie’s entire budget has been eliminated, does it?

BSA: CANARIE receives only block grants approximately every 5 years.  The last block grant was for $120m in 2007 . . . .  So currently CANARIE’s funding sunsets next March. . . . CANARIE has virtually no other sources of income.

Over its 15 years existence CANARIE has received almost half billion dollars in funding made from a multitude of block grants.  After the receipt of each block grant many times the government has told CANARIE that it should be self sustainable from that point on.  Finally I think this government actually means it this time.  But CANARIE’s board and management is actively lobbying government for another block grant when the current one expires next March.

However I have been arguing for some time that CANARIE should be self sustainable, at least on a day to day operational basis. Many of CANARIE’s counterpart research networks around the world are operationally sustainable like those in Australia, US, Nordic countries, Netherlands, etc.

Although some of these networks, from time to time do receive capital funding to invest in new infrastructure or build community networks. Being operationally sustainable, has its challenges (especially at this late hour), but it  has a number of advantages:

(a)    It would give CANARIE the freedom and independence to pursue more aggressive broadband strategies without fear of reprisals from incumbents lobbying government to prohibit such activities.  Internet 2, in the US for example, when it was created deliberately eschewed  government funding for this reason

(b)   CANARIE can do much better long term planning instead of having to stare at a 5 year horizon. The last block grant literally came at the midnight hour – and we had to start to give layoff notices to many staff just prior to receiving the funding

(c)    CANARIE can be a much greater force for innovation if it is self sustainable by offering innovative new services such as national wireless, zero carbon Internet, community networking etc

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So, if Bill is right, then the end of government funding doesn’t necessarily mean the end of CANARIE.

But will it continue to operate as a semi-independent actor capable of experimenting with advanced versions of the Internet that will only become widely available years from now?  Will it continue to push the envelope when it comes to open network and interoperability principles that define the original, non-commercial Internet?

In other words, will it continue to set an independent, alternative high-bar standard against which the incumbent telecom providers — Bell, Shaw, Rogers, Telus, Quebecor, Cogeco, etc. — can be critically assessed?

While I struggled to get my head around the idea that it could be okay to cut CANARIE off of government funds cold-turkey, it also took a while to fully realize Bill’s first point: that CANARIE has been put under incredible constraints already by incumbents constantly badgering the government to keep it on a short leash. In other words,the incumbents have pushed to keep CANARIE from actually competing with them in ‘the market’. It’s done what its done, so to speak, with one arm tied behind its back.

So getting CANARIE off the government trough seems to be Bill’s way of hoping that doing so might give it greater room for manouver outside the constraints imposed on it by governments acting at the behest of incumbent lobbyist. This is an incredibly important point, but one might wonder if government ought not steel its spine and actually stand down the lobbyists?

My feeling is that it would be better, in short, to have continued public funding and proper shielding from undue commercial influence. In a perfect world, we could have both, but I now understand why Bill doesn’t see cutting funds for CANARIE as the death blow I originally anticipated.

Maybe this can all be made a bit clearer by drawing parallels to television and hockey. It is commonplace in Canada and all countries with any kind of public service media for commercial broadcasters to whine about the CBC ‘unfairly’ competing with them for the rights to air NHL hockey games and anything else that draws eyeballs and attention. And so too for CANARIE, because the comparisons drawn with the private sector might not prove so favourable, better to cordone it off in areas the private sector is willing to leave behind to begin with. Seeing things from Bill’s perspective we can only imagine what CANARIE might it do if set loose after being held on a short leash for all these years?

In all of this is a vital demonstration in the political economy of communication, and it is as old as the first telegraphs, submarine cables and so forth in the 19th Century, and that is that governments shall never compete with private capital for markets. In ‘normal economics’ it’s called crowding out, while a more radical perspective sees this as the subordination of democratically elected governments to the interests of capital, or business to put it more simply. Today, it’s putting things like CANARIE and the CBC on short leashes, so that they can be ‘remedial public’ programs, not hardcore alternative providers in ‘the market’.

We can also see this kind of thing in  familiar terms when we look across the Atlantic to the UK, where the BBC — a core public service media provider — is constantly under pressure from the likes of James Murdoch of News Corp. and the Newspaper Publishers Association, for instance, to trim its sales. The Newspaper Publishers Association, for instance, argues that the BBC’s online news ambitions “threaten to strangle an important new market for news and information”.

Translation? The BBC should be tied to the mast of a sinking ship: television broadcasting, with rabbit ears preferably, while the rest of the explosive digital and commercial media market is handed off exclusively to ‘market forces’. This is a point that has also been driven home to me by my friend and NZ communication scholar, Peter Thompson, who recounts how Canwest Media used its ownership of television and radio interests to similarly argue against anything other than the most minimal role for TVNZ. It is also the basis of our own Conservative Government’s Directive to the CRTC to ‘rely on market forces to the maximum extent possible’ (for another post on this with respect to UBB and bandwidth caps, see here).

But back to CANARIE, some economic independence from government coffers could lead to greater autonomy and fewer shackles. Yet, CANARIE could also simply be sold to the highest bidder, likely those who previously fought tooth and nail to constrain it? In that sense, it would be grafted onto the operations of one or other of the existing incumbents and constitute yet another moment when government policy serves a primary purpose: to expand markets and open new sources of revenue for the private telecoms carriers.

These are some critical questions and with nothing more than a line item buried in the budget alerting us to any of this, we should start thinking about these questions now before CANARIE really does come to the end of the line in March 2012.

** With thanks to Bill St. Arnaud for his help and agreeing to let me use our correspondence for this post. Bill’s blog can be seen here.