hilippa Lawson
Public Interest Advocacy Centre, Ottawa, Canada

Paper for “Computers, Freedom and Privacy: The Global Internet”

The Internet holds great promise as a facilitator of social and economic development. Indeed, we are already experiencing the tremendous empowering effect that it can have on otherwise disadvantaged individuals and groups: witness, for example, the successful campaign by citizens’ groups to derail the Multilateral Agreement on Investment, the growth of community networking, and the explosion of individual websites. The potential of this new medium to empower citizens, as well as reduce government expense, improve delivery of services, and enhance competitiveness, has not escaped notice.
But with this great promise comes danger. If Internet access remains a preserve of a social elite, existing social disparities will only widen. If we fail to achieve universal access to the Internet, those who are already privileged will be further empowered, while those who lack basic amenities such as telephone service will be further disadvantaged.
In the new knowledge-based economy, democratic governments are recognizing the importance of universal access. In the race for global competitiveness, they understand the benefits of a connected and knowledgeable workforce, a vibrant electronic marketplace, and a citizenry able to use information and communications technologies in new and innovative ways. As we come to depend increasingly upon electronic communications, the realization of democracy comes to depend upon universal access.
Unfortunately, universal access to the information highway is one of those things that the market cannot achieve without government intervention. Left to its own devices, the market provides amply for those of us with financial resources, but offers limited access to those without. It provides abundant and cheap service to urban dwellers, but offers limited and expensive options to rural and remote dwellers. The evidence of this disparity in access is most stark at the international level, but it is also present domestically.
Allowing market forces alone to shape the Internet is undesirable for a second reason: it paves the way for domination of the electronic media by commercial interests. If it is to be meaningful, access must be to more than an electronic marketplace. The “electronic commons” must include public space, within which citizens can share ideas and information freely, away from commercial pressures and above the hubbub of the marketplace.

Canadian Statistics

Canada is proud of its achievements in respect of telephone service penetration. Under a system of monopoly regulation, we have achieved an overall penetration rate of over 98%, excluding Indian reserves and the far north.(1) This rate falls to 94% for households at the lower end of the income scale. Penetration of cable TV is also high in Canada, with 74% households subscribing (65% of low income households).(2)
Canada is also one of the most connected nations in the world: recent surveys indicate that 40%-55% of Canadians have Internet access, and that over 25% of Canadian households have Internet accounts.(3) Not surprisingly, this rate is significantly lower for low income households (16% vs. 46% for higher income), the less educated (12% vs. 44% for University educated), and seniors (6% vs. 39% for those under 25 years).(4)
Low income Internet users tend to rely more on access from school and public sites, while higher income users access the Internet from home and work. Rural dwellers are less likely to have access from the home than are urban dwellers.(5)
Recent surveys indicate that the rate of growth of Internet access in Canada is levelling off, although use by those connected continues to grow.(6) If true, this is a disturbing trend. Efforts are clearly needed to avoid the entrenchment of existing social disparities in Internet access.

Market Developments

The telecommunications industry in Canada is in transition: competition in the provision of long distance service is vigorous, while competitors for local telecommunications service are just getting off the ground. Long distance rates have plummeted, while local rates have more than doubled since competition was introduced. Wireless competitors are attracting more and more consumers, although they are not yet considered a substitute for basic wireline service.
The market for Internet access in Canada is also booming. Recent indications suggest that there are 700-800 Internet Service Providers (ISPs) in Canada, of which 100 account for 90% of users and 80% of traffic.(7) Some of the largest Canadian ISPs are affiliates of telephone companies. In addition to commercial ISPs, Canada has a variety of non-profit, community-based networks. For example, Web Networks, a non-profit online community of over 3500 Canadian non-profits and social activists, offers full service Internet access for a monthly fee.(8) At the other end of the spectrum, dozens of local community networks offer low fee or free access to community information, services and discussion groups as well as the Internet. In 1997, two thirds of Canadian Internet subscribers obtained service from an independent ISP, 21% from the telephone company ISP, 5% from the cableTV ISP, and 4% from community networks.(9)

Community Networks

Community networking is a growing movement in Canada, with approximately 50 community networks now in operation, and over 100 more in development. According to Telecommunities Canada, the national voice for community networks, close to half a million Canadians have been or are members of a community network, while many more access the information or use the services provided by these grassroots organizations. It is noteworthy that community networking in Canada predates commercial ISPs.(10)
Community networks are defined generally by their local focus, non-profit status, non-commercial nature, open membership, equitable (in many cases, free) access policies, partnerships with other community-based organizations, provision of a broad range of information of interest to the local community, and encouragement of the free exchange of ideas and information among members. They permit low speed, text-based access as well as graphical interfacing, so that citizens with early model computers and modems can still access the network. All community networks share the primary goal of providing access to those who cannot otherwise afford Internet access. They tend to rely heavily on volunteers.
The most advanced community networks in Canada offer access to an extensive array of local information and services, as well as access to the WorldWideWeb. They provide training in computer use, facilities for those in need, e-mail service, discussion forums, and much more.
Partnerships with other community organizations form the basis of much service and information delivery on the network, while corporate partnerships bring valuable donations of equipment and services. The National Capital Freenet (NCF), for example, benefits from the donation by Mitel Corporation of its telephone lines and Internet connectivity after business hours. The NCF’s partnership with local libraries means that it can offer some 61 public access terminals throughout the city of Ottawa.
Some community networks rely primarily on government grants for their operations, others on donations, and others on membership fees. Financial sustainability is an ongoing issue, especially for those community nets wishing to maintain a policy of free access to this non-commercial electronic space.

Regulatory Developments

The Canadian Radio-Television and Telecommunications Commission (CRTC) is under a statutory mandate to regulate the provision of telecommunications services where market forces cannot be relied upon “to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada”.(11) The CRTC has overseen the introduction of competition in both long distance and local telecommunications markets, and is currently examining regulatory issues arising out of new media such as the Internet.(12)
Long distance rates have been deregulated, and funds have been established for the continued subsidization of basic local residential telephone rates in a competitively neutral manner.(13) In light of rising rates for basic local service, the Commission is monitoring telephone penetration and disconnection rates, with a view to establishing discount rates for low income households (similar to the Lifeline and LinkUp programs in the USA) should the need arise.(14) Selective regulation of the telecommunications market will continue to be needed in order to address systemic market failures and inadequacies that threaten to impede access.
Competition should be allowed to flourish where it can best achieve our ultimate goals of affordable, universal access. But this doesn’t mean turning a blind eye to the market. Indeed, governments must guard vigilantly against anti-competitive behaviour and harmful mergers in the markets for computer hardware and software, as well as Internet service provision. The outcome of the Microsoft anti-trust case, for example, will have important ramifications for access. Healthy competition in the markets for computer products is essential in order to avoid monopolistic pricing and other practices harmful to consumers.
The CRTC has established regulatory safeguards against anti-competitive behaviour by incumbent firms and other market players, while the Bureau of Competition – Canada’s anti-trust authority – reviews mergers and investigates and prosecutes violations of the Competition Act. Both bodies are currently dealing with complaints of predatory pricing of ADSL-based retail Internet access by affiliates of Bell Canada.(15)

Government Initiatives

The Canadian government, eager to capitalize on our comparative advantage in the development and use of communications technologies, has publicly committed itself to making Canada the most connected nation in the world by the year 2000. The government’s agenda of “Connecting Canadians” includes a number of strategies for improving Internet access, and relies upon funding partnerships with the private sector as well as other levels of government.
Under the Community Access Program (CAP), 5000 rural and remote communities and up to 5000 urban centres are to have public Internet access sites by early 2001. The program is designed to provide Canadians with affordable public access to the Internet and the skills to use it effectively. Matching grants are provided to local non-profit organizations who then act as “on-ramps” to the Information Highway. Close to 4,000 CAP sites have been established to date, most in libraries, schools or community centres. Each site is staffed with trained personnel.
All CAP sites provide Internet access to the public, some for free and others for a fee. Terminals also typically offer access to government services, educational resources, and in one quarter of cases, public e-mail. Training in computer use, Internet navigation and/or web page development is offered by three-quarters of CAP sites.
CAP sites have been successful in raising public awareness about the Internet, and in providing access and training to citizens in a number of communities. However, their sustainability in the absence of continued government funding is questionable. One third of CAP sites recently surveyed in New Brunswick indicated that they would have to close immediately if government funding were withdrawn. Only 18% thought that they could remain in operation without cutbacks (e.g., to training services). Efforts are therefore underway to develop models for the sustainability of CAP sites. Approaches include user fees, private sponsorships, and partnerships with other community organizations, educational institutions and government programs (e.g., employment offices) with a view to reducing cost. The imposition of user fees is particularly controversial as it risks defeating the main purpose of community access sites: to provide a means of access to those who can’t afford a home computer.
SchoolNet provides Canadian schools and public libraries with on-line access to Internet-based resources. The government aims to have all of Canada’s 16,500 schools and 3,400 libraries connected to the Internet by March 31, 1999.
What it means to be “connected”, however, is not at all clear. While some schools have been able to take advantage of this new resource, most haven’t yet determined how or why they want to use the Internet. In a time of significant cutbacks to education budgets, most schools don’t have the money to train teachers in Internet usage, or support staff in equipment maintenance. Teachers have yet to be provided with the necessary training for this program to achieve its potential.
As part of the SchoolNet program, Computers for Schools provides Canada’s schools and libraries with surplus computers and software from governments and the private sector. In workshops set up across the country, students are given on-the-job experience refurbishing computers for use by schools and libraries.
VolNet is a new program jointly administered by government, private and voluntary sector interests. It aims to connect 10,000 charitable and non-profit organizations to the Internet by early 2001, thereby helping them to play a stronger role in Canadian society. In addition to Internet access, the program will provide recycled computer equipment, Internet skills development, free or low-cost software, and electronic information.
Under the Smart Communities initiative, the federal government seeks to assist communities in the effective use of information and communications technologies with a view to transforming the social and economic circumstances of the community. The goals of this program are lofty, and include empowering citizens, stimulating economic growth, and improving education and health care. It is expected that financial and technical assistance will initially be provided to selected communities across the country, with a view to establishing 20 demonstration “smart communities” by the year 2000.
This program appears to be a response by the Canadian government to the international “Smart Communities” movement, to which other countries have already dedicated substantial government resources. Canada does not want to be seen as lagging in any respect. However, it has been noted that many of Canada’s community networks are already fulfilling the role of “Smart Communities”. It is unclear how this new initiative differs from the grassroots community network movement, except that it involves more “top-down” direction, at least initially. The Report of the Panel on Smart Communities to the Canadian government stated:
Given the innovation already apparent among Canadian communities, it is fair to question the need for any kind of national overview of plan. Indeed, it is reasonable to assume that over the next few years, left to their own devices, Canadian might well see the blooming of several hundred community initiatives. However, rather than taking a laissez-faire approach, Canadians should actively promote the adoption of best practices across and beyond communities to share knowledge and experience more quickly and effectively.(16)
It remains to be seen how the “Smart Communities” initiative will interrelate with existing community networking initiatives.
Provincial governments have their own array of programs designed, in part, to improve access by their citizens to the Internet. For example, Ontario’s Telecommunications Access Partnerships “provides assistance to encourage businesses, economic sectors, public institutions and communities to work together in innovative ways on information highway projects”. In British Columbia, an “Electronic Highway Accord” among government, industry, labour and community groups sets out a vision, guiding principles, objectives and targeted outcomes, with a view to providing all British Columbians with “affordable electronic access to networks and services enabling them to communicate, learn, be entertained, work, and prosper in an information-based society”.(17) Under the guidance of this Accord, the B.C. government has provided significant financial assistance to community networks and related initiatives. Other provinces have similar programs.

Public Interest Group Proposals

A number of academics and public interest advocates concerned about access in Canada have developed a proposal for a “National Access Strategy”,(18) which builds upon the initiatives described above. This coalition views the government’s connectedness agenda as too narrow, leaving “serious gaps in terms of the conception of access, who is served, the consultative process, formative assessments, and governance.” Their proposed strategy focuses on access as a multi-dimensional phenomenon aimed at empowering citizens, especially those who are currently marginalized. It emphasizes social discourse rather than service delivery, communication rather than commerce, and equity rather than efficiency. It calls for much greater government support of non-profit community initiatives to improve access, and the establishment of an independent, public interest body responsible for implementing the national access strategy.
Other public interest advocates argue that the efficiency, effectiveness and sustainability of access initiatives can be improved through greater use of partnerships, both within and outside of government, but that ongoing government funding of community initiatives is both necessary and appropriate.(19)


There is a great deal happening in Canada, both at the grassroots and the government policy level, to improve Internet access. Community networks and libraries have been in the forefront of this movement, while governments are providing significant funding, direction, training, and other resources for the expansion of access at all levels. Key issues that remain to be resolved include the sustainability of government-funded initiatives, the provision of training and resources in order that schools can take advantage of new computer facilities, and the preservation of non-commercial, public space on the Internet to which all citizens have access. Canada has set an ambitious goal for itself: to be the most connected nation in the world by the year 2000. We’re well on the way, but there is still much work to be done.
1. Penetration in many northern communities and Indian reserves is much lower.
2. Statistics Canada, Household Facilities by Income and Other Characteristics, 1997; Cat. no. 13-218-XPB, Table 1.0.
3. Comquest Research, Latest Canadian Internet Trends, Feb.1999 (www.comquest.ca); Ekos Research, The Information Highway and the Canadian Communications Household, Dec.1998.
4. Ekos Research, op cit.
5. Comquest Research, op cit.; Ekos Research, op cit.
6. Comquest Research, op cit.
7. Canadian Association of Internet Service Providers (www.caip.ca).
8. See www.web.net
9. Ekos Research, op cit.
10. The National Capital Freenet was formed in 1992, with the Vancouver Community Network and the Chebucto Community Network (Halifax) coming on stream in 1993.
11. Telecommunications Act, S.C. 1993, c.38; s. 7.
12. See the CRTC website (www.crtc.gc.ca) for information on past and current proceedings.
13. The existing Funds only operate in territories where competition has been introduced. The CRTC is currently deliberating on the appropriate model for subsidizing service delivery in high cost areas within and outside of these territories. In addition, the current system of collecting contributions only from long distance providers (based on minutes sold) is being reconsidered.
14. Anti-poverty, seniors, and other consumer groups have argued for some time now that affordability of basic phone service is already a serious problem for large numbers of Canadian households, and that measures such as a targeted subsidy are needed now. They point out that penetration rates are misleading, given the essential nature of the service: people can’t afford the price, but at the same time, they can’t afford to do without telephone service. The most recent Canadian statistics indicate that app. 126,000 Canadian households are doing without telephone service because they can’t afford it.
15. Competing ISPs argue that Bell is abusing its market dominance by offering ADSL-based Internet access to retail customers for a fraction of the cost to either Bell or its ISP competitors. It remains to be seen how this dispute will be resolved.
16. Nov. 1998, p.10 (see http://smartcommunities.ic.gc.ca)
17. www.ista.gov.bc.ca/pubs/accord.html
18. “Key Elements of a National Access Strategy: A Public Interest Proposal” (August 1998); www.fis.utoronto.ca/research/ipirp/ua/
19. See Andrew Reddick, “Community Networking and Access Initiatives in Canada” (PIAC, 1998).