Paul Hoffert (Bell Broadcast and New Media Fund)

Information deficit is two words, two thoughts brought together. Some areas of deficiency in Canada, however, are at last diminishing: there no longer appears to be a deficit in the gender equation; the usage we are seeing is essentially 50/50. Also the age bias is rapidly diminishing, so that even in a category of 65+ we are seeing some very significant numbers of people on-line. Neither is income bias as extreme as many of us might imagine - nearly 30% of people on-line earn less than $40K per year. There is, however, one group of people who do not figure in these statistics: those who do not speak English. There continues to be a language gap in this country, where we are very conscious of Francophones and new Canadians who speak a myriad of other languages yet do not find them equally represented on-line. Additionally there is a major gap for people who live in remote or sparsely populated locations - disadvantages from the perspective of connectivity. People living in rural areas in general, or in other areas where there is low population density - where telephone companies and cable companies do not find it economical to provide the basic connective services of larger areas - are excluded. Minorities, mostly in the United States, are disproportionately excluded, and although lower income is not necessarily an indicator, lower education is a very strong indicator for being off-line. Lastly, there is a large number of the disabled, or technically challenged, who are presently excluded to varying degrees and in various ways by accessibility.

We therefore must wonder about the role of government in all of this. Since everyone pays taxes it seems only right that everyone should have equal access to information - should have an opportunity to be on-line. The argument that my colleagues and I like to make, and continue to make without much success, is that life's physical roads are built with public money, federal money, provincial money, with municipal money, and that the information roads should also be financed by government. It is not so simple. When you go out of your house, when you go out of your apartment, when you go out of your condo, there is a paved road. It gets you onto larger paved roads - some of them free and public, but some of them private or tolled. Notwithstanding this, everybody expects not to have to walk in the mud and to have clear access to all those other roads. Unfortunately, this simple - and, it seems to me, entirely reasonable - argument did not take hold when it needed to in 1995 at the international Organisation for Economic Co-operation and Development meeting in Paris. I was a representative for Canada as we were deciding whether the information highways should be funded by government or not. Of all the countries represented it was actually only Sweden that proposed government should consider connectivity, including broadband connectivity, as public entitlement. It comes as no surprise, then, that Sweden is now the number one wired country in the world. Canada, on the other hand, has managed to come in at number two, which is not too shabby because while other countries are primarily driven by their private sectors, Canada generally adds some public support for private involvement. We have largely been able to forge these kinds of partnerships, public and private, which seem to work not too badly for us.

As to our government initiatives, every ministry of the federal and provincial government is involved in various kinds of initiatives. Those that affect this conference most strongly are Industry Canada (which has been concerned with getting people connected, most notably the Community Access Program for smaller and rural communities); something called Volunteer Net or Volnet; and SchoolNet, which I understand about six months ago made Canada the first country to have 100% of its schools connected in some way to the Internet. And then, of course, there are government strategists for business information. Heritage Canada, one of the sponsors today, has many such initiatives. Among these is one large catch-all, the Canadian Digital Cultural Content Initiative.

In addition to this are some major private initiatives, among them one that you may have heard of called CANARIE, an acronym that does not quite scan, but represents an advanced network for research and education. It is a significant government and private-sector partnership. In addition to this is also the Bell fund, which I chair. And the Bell fund is interesting in that it is a private-sector fund, not reliant on any government money. Initially funding came from Bell Canada - now Express Vu - which currently gives us in excess of $4 million a year toward deserving applications. Such awards involve far less bureaucracy than does government funding, because they also take less time to process, as we try to turn applications around quickly. The interesting thing about this is that Express Vu gives us such funds to distribute because the company is required, by a government regulation called Broadcast Distribution Undertaking, to contribute 5% of its revenue for the creation of Canadian content. To manage this fund beneficially, we often find ourselves in the ironic position of giving promising groups money to help them make us a proposal that is good enough - to give them money.

Access to the Internet, in terms of addressing the deficiencies we have identified, is going to be one of the things we will invest in. Sixty percent now, and the current programs should provide almost all Canadians with close to universal access, including students, Francophones, non-English speakers, and rural people. Some segments of the population may not have access initially in their homes, but there are ways to address this in the meantime. In Toronto, near where I live, I did a talk recently at a public library. There are four floors to this library, and six months ago they cleared all the books from one of the floors to install 200 computers so anybody can come in and go on-line at no charge. They even have a bank of computers dedicated to content creation for which there is a nominal charge for access to Photoshop and all the various programs, along with scanners and so forth. But for anyone who wishes to go onto the Internet and have high-speed access, it is free; however, there are often terrible line-ups of 100 to 200 people to use that facility, so clearly much remains to be done. And, I think that we are going to see a lot more congestion in publicly funded institutions.

Access to content - this is the other deficiency we are going to be addressing. It is called information. It is a bigger problem than most people realize, one even more serious than Canadian content, but that will always be tied to it. I don't think many people in the content industries understand the Canadian content issue. When you go on-line it is totally different from the Canadian content off-line and has implications that loom much larger. The issue is: do we have a right to territorial and cultural integrity in our media? I put to you, if nations do not have this right, what is a nation? The thing is that the idea of the global village, coined by a former colleague of mine, Marshall McLuhan, after 18 years in the media field, was never intended to mean what it has come to imply. It does not mean that there will be a harmonization of the cultures of the billions of people around the world once they are all connected. We basically do not care about billions of people, nor do we care to see the cultures of the world melted down.

When those planes smashed into the World Trade Centre, very few people in North America had been hearing much about Afghanistan, even if they were on-line. We are genetically programmed only to trust about 20 people outside our extended family and only keep track of about 150 relationships - a group about the size of a small tribe or village. Yet each of us knows about a thousand people, so even for those people that we know, almost nine-tenths of them do not fit into the category of relationships we can track.

The problem with virtual communities on-line, like the Internet, is that they totally lack substance. People pretend but cannot really trust each other when for all they know, they may be talking to a nine-year-old girl or a 49-year-old man. This makes a difference. It is not the same as sharing a beer; it is not the same as coming to a conference like this and perhaps sitting next to somebody and going out for coffee and having a bit of a chat. Face-to-face relationships are very important and will not be replaced by on-line relationships.

What I believe and what many are beginning to believe is the future of the twenty-first century and the digital age is not the global village at all, but the local village. What happens when a real geographic community in which people have physical contact with each other and know each other superimposes on itself all the benefits of an on-line community? It may be that we can have the best of the last century and this. It may be turning out that we will rediscover pre-industrial social values, a sense of place, a sense of rootedness, stronger families; that we return to local support, return to local retailing - and, most importantly from the perspective of this conference - return to local content.

In the 1990s, I was director of CulTech Research Centre at York University, where I led teams that investigated digital content distribution on broadband networks. We followed both the technology and cultural impacts of the information revolution. In 1996, in Ontario, we undertook one of the most extensive digital communities trials to date. In Newmarket, a suburb of Toronto, we took 100 homes and spent approximately $100 million: so it actually cost us a million dollars per home to do the trial. We wanted to see what would happen, how these users would react to content. We gave them advanced digital devices throughout their homes and watched it become, on many levels, a highly integrated community - a community in the broadest sense.

Meanwhile the content industries in Canada are going into crisis mode. What I call the legacy content distribution or the pre-new media, the old media legacy. The media had three layers of distribution: the creators at the bottom, the people that make the stuff; and in the middle the cultural industries, those industries that our government and our citizens support most strongly (generally, Canadian public companies, Canadian publishing companies, Canadian record production companies, and so on); and at the top the major distributors, the big guys - those five companies that control 90% of worldwide distribution. Legacy media such as CDs, books, and video cassettes must be distributed through those large multinationals, because it is very expensive to keep warehouses, merchandise stocks, et cetera. What has happened over just the last few years is that the power in the cultural industries has been decreasing and will be decreasing yearly as it flows upward and downward. What is happening is on-line creators no longer need the book publishing companies or the record companies to get an audience. Anyone can go on-line and become his or her own book publisher, recording distributor. American writer Stephen King did this recently, and Canadian artists like Jane Siberry, who once used a major international distributor and now distributes her own records.

Because, in time, creators are going to be able to get records directly to their audiences, it puts the recording industries that we have long been supporting at risk. One reason for this is that as soon as they start being successful, they are being sucked up into the mega mergers: Bell recently bought CTV; Globe and Global TV, Time Warner. In this trend fewer and bigger companies get to the top and they all want to acquire content. So what does that leave us with? It leaves us with a fundamental problem, in that the very layer crucial to Canadian content is very much at risk.

The question is what are we going to do about it? Because this is the action stream, I thought I would put forward to you some proposals for action rather than just talking about my own experiences and perhaps relating some statistics.

The first action proposal I think to consider is something called super distribution. It is one of those things that unless you are involved in either law or digital rights management, you may not have heard of, but here super is used in the way of superconductivity, the removal of friction. The idea of super distribution is that instead of protecting content by encrypting it and stopping people from using it, which absolutely opposes the intent of copyright law (something that exists in effect to ensure that the widest range of people can access and can rightfully acknowledge content), super distribution removes the friction, so you have unencrypted general content that can be freely copied by everyone and that even encourages them to distribute it to others. For this reason it is also called viral marketing or viral distribution. Terms and conditions of the content's use are simply bound to the content itself and serve to track its usage. The general idea is this: before it gets used, content phones home and asks if it is OK. Then it essentially lets somebody know that it has been used - this transaction functioning like a meter. This is a change from use prohibition to use metering. This is one way we might be able to have an explosion of content that would at the same time be available to a vast number of Canadians.

For more specialized and contained purposes I put together a group called OnDisC Alliance or Online Distributed Content, whose users are in the educational system - students and faculty members at schools. Initiated at Sheridan College, it is expanding to include the arts schools across Canada, the University of Toronto, University of Calgary, University of Montreal, and others. The educational system is a great system to look at for a couple of reasons: one reason is that the biggest business in North America is actually education. Unlike the intranets, certainly all universities and colleges have closed protected systems that we call Internets, and so it is a lot easier to do a trial without constantly leaking into that piracy-prone thing called the Internet. We have content from many suppliers, many types of content, including the CBC, the Virtual Museum of Canada, TV Ontario, book publishers, the CCA (which is an aggregation of representative works from contemporary Canadian artists), music, and so forth. In these trials we also want to test e-commerce matters, for as free materials become popular, distributors are going to start charging for them. So we also want to test reader acceptance. Will people be willing to pay? Will faculty members really use this stuff and test some of the technologies necessary to make this happen?

By a simple business model involving a site licence and fee, for journals or software use, infinitesimal sums (per page of text, per minute of video) accrue to the content provider from subscribing institutions. Having been at this for some time, I decided that we didn't want to try micro-payments or any of this stuff where you have to reach into your wallet every time you need some content. We would like to use it as a test bed across Canada for all kinds of content, many users, different business models, and digital repositories. 1

The second action proposal I suggest to you is that we need to ensure we have the necessary tools. One misunderstanding about the Web involves the idea of repurposing. This is what companies want to do: having spent all this money on television shows, books, CDs, and the rest of it, they want to put it on-line. It is called repurposing. The problem is that what users want to do on-line is based on what they can do on the Internet and that is not to read the whole book, not to watch the whole movie. They want to excerpt bits and pieces of things and put them together in their own aggregations. Their own aggregations are Web sites; their own aggregations are PowerPoint presentations; and their own aggregations are CD-ROMs. That is what we call new media.

New uses need to excerpt and aggregate, but we don't have the tools to do that. It is not so much the physical tools we don't have, but the rights-management tools. So we excerpt the needs, in order to be media dependent (obviously to select a portion of an image is different from selecting a portion of a radio show), but the aggregation should be media independent. We should have a tool that lets us take a bit of this and a bit of that and a bit of the other and put it together in the way we need it. As it happens, we need to automatically generate this rights information with this very activity, because without it people won't be paid and without being paid will not make their materials available. In addition, the excerpt and the aggregation need what we call a new unique object identifier. Because to use one paragraph of a book, the conditions are clearly not the same as using the whole book, yet it needs to be linked to the parent's identifier. We call this a child object - the excerpt is a child object of the original. So we need to take all the terms and conditions for use that were in the parent and have them inherited to the child, then link to the parent identifier. Lastly we need to inherit all the rights conditions, the metadata from the parent object. That would be a very good proposal to move forward.

Action proposal three: This one is very controversial and I don't know if we have the political will to do it. It is, essentially, to make Canada an intranet: I-Canada for Intranet Canada. Of course, this goes against all the people who started the Internet, who will be turning over in their tweedy suits, if not yet in their graves. I-Canada could be a safe place for kids, filled with informational content about Canada. A very revered expert, no less than Bill St. Arnaud, head of technology for CANARIE, suggests exactly this. St. Arnaud's idea is that it is possible to have a series of layered Internets; in his view we cannot go forward with one Internet. Currently the Internet uses fibre optics, which carry a little modulated light of a single colour and frequency. It turns out that within this same little extrusion of glass you can have many different frequencies and many different colours. So you are implementing the equivalent of many Internets travelling over exactly the same wire - without having to do anything drastic in terms of the infrastructure line, you could have completely distinct, discrete, secure intranets, different intranets. At the same time in this concept you could also have "the Internet," which is open and free and is exactly the way the original people wanted it to be. And then under it you might have something like I-Canada - accessible from and to the Internet, but which would be protected territory, a place where you could control content. Under this you could have other Internets: AOL, and Sympatico, and all these other places.

This action proposal I believed until yesterday was one that might not have any chance of implementation. But as of today, Minister Sheila Copps has announced that she is going to bring to cabinet immediately a modification to the Copyright Act of Canada that will essentially protect the television industry from anyone taking on-line television programs and distributing them.

Why is that important? It means that if the government had the political will, it could pass yet another amendment to the Copyright Act. That might be to legislate an Internet service provider, so that on-line content could be paid for just like cable TV. We would simply pay a cable TV bill, some portion of which goes to the connection that comes into our homes and a certain portion to the value of the program. So if Canadians could pay a flat monthly rate for unlimited use of any content, that would be part of their ISP. Now, a portion of the content fee - and I am suggesting 5% because that is what it is for television - could then go, just exactly like it does from our cable and satellite TV bills, toward creating Canadian content. It would accrue into a fund, a cable TV fund that would come back to Bell and provide more funding.

I think it is an interesting idea, but are the stakeholders ready for it? Absolutely not. Canadian distributors, record companies, and so forth are presently lagging so far behind their consumers that when such an idea is brought forward they just don't get it. It is a dangerous situation, because in the United States five major record companies are poised to announce their pricing for access to on-line music. Whatever the subscription cost turns out to be, the implications have to do with the territorial integrity of Canada. Essentially when we log on and pay our $10 a month to Sony to get music match, the funds are not going to go to Sony Canada. They will just go to the service, to Sony's head office. The net result is that Sony Canada, which is not even a Canadian company, but just a Canadian branch office, will close. Branch plants are only needed for physical distribution of physical products. As soon as products are on-line and anybody, anywhere in the world can get them, you need only one central supplier. And I guarantee that that one supplier is not going to be in Canada. Moreover, when Sony International is making the music available for everybody in the world, the ratio of Canadian recording content will be a lot smaller than it is today.

Other initiatives might take inspiration from the big players of Microsoft, who have something called passport, a content service aggregating content and evidently making it available for users, free. Meanwhile Microsoft and other major multinational companies are manufacturing money. If we do not act in our own best interests now, what are the chances we shall be able to move forward and have any Canadian content, any Canadian business even to the extent that we have today?

Sadly, I can tell you the stakeholders are not ready, neither the the rights-management companies nor the collectives, all of whom are absorbed in their own agendas. They may well appreciate the risks as well as the opportunities, but there is no action. The technology is important, but the business models are more so. We really have to concentrate on finding our way - it may not involve any of the ways I've suggested, but however we agree to go about it, we must get out of the box we have put ourselves in.

The future will include all the kinds of content I've mentioned, but I thought I would give you a couple of examples that we do not usually see on-line, one of which is live stream content. As a musician I have been involved with these kinds of trials for a very long time. In the early 1970s, I had a rock 'n' roll band called Lighthouse. We disbanded for 20 years then rebanded in 1995, at first playing traditional jobs, where the band and the audience were in the same location. In 1996 when we were asked to close the international Smart Cities conference, I split the band into two halves. Of the band's 10 musicians, five were at the hotel where the conference was and the other five were at Centennial College in Toronto, about 30 kilometres away. In a fit of collaboration the telephone company and the cable company got together and gave us life-size images of the other half of the band. So we had one band in two locations playing to two audiences, one live and one virtual.

For an interactive conference the following year we put together a jazz band in four locations, with both the bass player and drummer in Montreal; myself at the BravoTV studios; the saxophone player and trumpet player at the Bamboo Club in Toronto; and the guitar player at York University. A year later, audiences watching the 1998 Olympics saw Sergei Ozawa conduct Beethoven's Ninth Symphony with choirs and orchestras around the world. He very kindly credited us with the idea, because the Japanese delegation who put together the opening ceremonies of the Olympics had come from Toronto, where they'd seen our concert. In the end, theirs was very like a little jazz band in four places, but they had a bigger budget and audience.

In 1999 we were able to overcome the greatest problem for all live concerts, something called latency of delays. When we were performing with the jazz band, there was a quarter of a second delay between Montreal and Toronto, so we had to play our music a quarter of a second ahead of what we heard from the speaker (don't try this at home). But by 1999 I had my whole band, Lighthouse, in Toronto, and to each of the four neighbouring cities we sent a direct fibre pipe end-to-end, with six gigabits per second so that the video did not have to be encoded, did not have to be compressed. There were no delays, and it was no different from playing in a recording studio. Very shortly I will be part of an international supercomputing conference in which we are going to use a system called Access Grid to support a kind of live colloborative performance between Canada and 30 countries around the world, to which it will also be broadcast.

My conclusion is twofold - one side good, the other bad. Canada is very well positioned to be a world leader in solving the digital dilemma; however, if Canada does not act quickly, it will become an economic region of the United States, with decreasing representation or expression of our languages, our culture, and our business.


  1. These are more specifically called object repositories, which sounds like a medical condition but actually refers to caches of digital teaching objects held at universities. They comprise such things as dimensional and interactive visual resource libraries. Object repositories are a wonderful initiative of CANARIE and others.

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