CRISIS AND OPPORTUNITY
National Computer Utility
The Federal government was pressured to develop the computer service industry into a utility. They were reluctant because there was already much struggle to have the advantage (e.g. provincial government, utilities, and private industry). They felt a need to develop policy around this and started to do their homework.
Americans taking over Market
Eric Kierans was a liberal cabinet minister and he feared that if the government didn’t take action and protect Canada’s interest, that the US would take control. The Canadian government planned to use horizontal diversification to combat the potential takeover from the US – (countering a competitor by invading the competitor’s core industry or market). Kierans felt that increased expenditure was needed to make the necessary changes on Canada’s behalf.
DOC
Department of Communications (DOC) predicted the computer service industry would become the third largest industries in the country in ten years.
Canadian Computer/Communications Agency
Canadian Computer/Communications Agency was proposed to coordinate the new utility. They were part of the DOC in the form of a task force and $5M had been earmarked for the creation of a national computer communications network. The ambition was to prevent total foreign domination of the computer and communications industries. They wanted to ensure that computer centers and information be kept in Canadian hands and under Canadian law. The proposals were grounded because of concerns of public policy. Kierans and his officials argued that this was the states chance to put its imprint on the young industry.
Government Predictions
The government predicted that the computer service industry would either be in balance or surpass the auto industry in size and contribution to the Gross National Product (GNP), as well as impact social and political structure; however these impacts were left undefined.
Foreign Control
Because of the fact that 80% of domestic data processing was supplied by companies outside Canada, fear of losing control of what could possibly become the largest Industry in Canada was thought of as disastrous. For example, foreign banks storing Canadian data may affect the country’s autonomy, and they would be beyond the reach of Canadian governments and courts.
Merger of Computers/Telecommunications
Merging computers and telecommunications was handled with kid gloves – on one side of the spectrum it was thought that one region or class would be favoured over the other. On the other side – the merger held promise that the country would become a great information system – making the computer as common as the telephone is. Eventually the merger would look like the best alternative. The levels of creativity and leisure time unleashed would be added to Canada’s economic and social health.
Control Data Canada
Federal government underwrote 40 per cent of Control Data Canada’s expansion program. CDC felt that a computer industry was vital to the industrial expansion of the country and inspired to become the backbone of a new Canadian computer industry. They wanted to spearhead the initiative but the government was reluctant to fund them because it may affect the position of Canadian owned and operated firms.
Canadian Computer Communication Task Force
A task force was formed (Canadian Computer Communications Task Force). This committee was lead by chairman, Dr. H.J. von Baeyer, and he was to direct a series of studies that would form the basis for a new technology policy. After several months, von Baeyer developed a report called “Branching Out”. He concluded that all levels of government should recognize computer communications as a key area for social and industrial activity. The report advocated a competitive and innovative industrial environment, fostering the development and self-reliance of the industry, ensuring a proper degree of Canadian independence. It was recommended that the federal government play the role of “focal point.” The idea of the utility model was dismissed because of suspicion that the way business was done would radically change and invoke more state interference.
Branching Out
Bell Canada and IBM Canada were in agreement with the conclusions in the report. IBM was careful to support “Canadian Control, not Canadian ownership.” Other organizations, such as the Canadian Association of Data and Professional Service Organization (CADAPSO), and Electronic Industries Association of Canada (EIAC) strongly favoured a state-led model and supported a “buy Canadian policy.”
PROVINCIAL RESPONSES TO CONVERGENCE
Divided jurisdiction could interfere with Ottawa’s plans to introduce a national computer communications policy.
Some provinces retained primary responsibility for telecommunications regulation; others wanted to connect their province to the promise of the new technologies. Ontario had a special interest because they controlled a majority of the computer service industry in Canada. Saskatchewan responded by stating, “noneconomic social objectives for an industry requires a utility, equitable access requires a utility, and no duplication requires a utility.”
Discussions turned parallel with Ontario Hydro and James Shantora, chairman of the Telecommunications Committee formed in 1970 to consider Ontario telecommunications policy, put the two together and said that an analogy might be made between the computer utility and the present hydro electric utility where different generating plans in the province of Ontario are tied in with lines, not only in Ontario, but are connected into a hydro bridge system that stretches all the way to Florida and to British Columbia through the northern United States. In thinking of a computer network some standardization is required as to language, common way to represent characters, etc. The analogy can here be if drawn between the hydro electric networks where the frequency and the voltage, and the electrical outlets have to be standardized before any type of grid system could be established.
It was significant that computer networks related to the telecommunications field as a whole. In order for the business to grow, one government had to guide and coordinate. If left to the Federal government to occupy the entire field, Ontario’s interests would be left to the sidelines.
Utility Model -Where would the money come from?
With the idea of a computer utility very much alive, Ontario feared that if Bell were the chosen provider, Quebec and Ontario would essentially carry an intolerable financial burden. Quebec felt that computer communications should be administered at provincial level. Saskatchewan was pushing to keep abreast of technological trends mainly because of the establishment of their Medical Care Plan. They were sold on saving $243,000 per year by using computers instead of the conventional punch-card equipment.
In 1974, Saskatchewan developed a computer utility; calling it Saskatchewan Computer Utility Corporation. The corporation grew slowly, but seemed to adequately service the provincial need.
Several provinces then followed suit and established their own initiatives in the computer communications field. Provincial actions further stalled Ottawa’s already troubled plans for a comprehensive national computer communications strategy.
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