The Toronto Star, Quayside, and Still Not Getting the Core Concept (MIDP Addendum #4)

One of the best gags in Archer comes from an early first-season episode, in which the team is assigned to prevent someone from blowing up the inaugural flight of a helium-powered rigid airship. Throughout the episode, our titular hero proves incapable of telling the difference between helium, a completely safe inert gas, and hydrogen (think: Hindenburg). Finally, exasperated fellow agent Lana Kane snaps, “What about that are you still not getting?” To which Archer replies, “Well, obviously the core concept.”

That episode came to mind when reading the Toronto Star editorial board’s and Star columnist Martin Regg Cohn’s mournful obituaries for what they saw as a tragically lost development opportunity. In their telling Sidewalk Labs was done in by ignorant activists and foolish privacy zealots who couldn’t see the bigger picture. They bemoan this grand “lost opportunity” (in the words of the Star editorial) for innovative urban development. The tone and content of both articles – as well as an earlier editorial criticizing Ontario Premier Doug Ford for criticizing Quayside – is basically, sure there were problems with it, but some of their ideas would’ve worked out. And now we’re going to be stuck with the status quo of ugly condos or – heaven forfend! – a Ferris wheel.

Cohn’s oped and the Star’s editorial position suggest a particular view of the world, one in which “innovation” is a product you can buy off the shelf, and in which Quayside is best understood as a normal a physical urban development project. While Quayside’s physical-infrastructure aspects were important (obviously), particularly for Torontonians, they were not the main problems with this project. Nor were they the most important part of the project.

I think The Star’s blind spot is shared by a lot of people and policymakers who don’t deal directly with intellectual property and data, so I’m going to do my best to lay out the source of this misunderstanding as I see it.

The Core Concept

Here’s an example that I hope will highlight to Cohn and The Star what’s changed in the past two decades. When the 407 electronic toll highway was built in the late 1990s, the data its sensors collected was seen as a means to an end: identifying drivers so they could be appropriately billed. In 2020, the equation is reversed: The building of infrastructure is now the means to the end of collecting data, which is now seen as economically valuable in its own right. Projects like the Quayside plans are all about the data collection, as well as the intellectual property and standards that Sidewalk Labs was hoping they could produce in Quayside.

In other words, it’s no longer 1999. Most of the cheerleading for Quayside seemed not to see how projects like these have changed: they focused on the timber skyscrapers, not the sensors, standards and intellectual property.

Quayside was a Toronto Project with National and International Implications

Let me be blunt: If the Quayside proposal had been just another urban-development project, nobody outside of Toronto would have had any reason to care about it. If it turned out to be a mistake, Quayside would have been about as troubling as if Waterfront Toronto had decided to build a Ferris wheel on its land. Which is to say, Torontonians would be stuck with an eyesore and a lost opportunity for something better (unless you like Ferris wheels), but life would continue on elsewhere in the country, with the added bonus that Calgarians and Haligonians would have one more thing about Toronto to mock.

But the proposed Quayside project was not a Ferris wheel. Quayside mattered not because it was a terrible urban-development project, but because it was an exercise in designing data-collection standards and promoting a particular vision of digital economic development. The problem here is two-fold: first, that Quayside would have given the opportunity for Google to drive Canadian economic policy to a disproportionate degree; and, second, it would have allowed Waterfront Toronto (and, really, Google) to become a de facto data-standards-setter for the country.

This is where it’s important to understand that “innovation” isn’t something that you buy. Innovation is something that governments create the conditions for. Innovation happens all the time, but it’s the underlying rules that determine what type of innovative activities occur, and whose interests they serve. That’s what was at stake here.

Quayside was all about determining what these rules were going to be, who was going to set them, and in whose interest. This matters because all regulatory frameworks are not created equal.

Google – let’s not be so naïve as to pretend that Sidewalk Labs is anything other than a wholly controlled Google play – has a particular business model based on the ubiquitous surveillance of everything at all times. The criticisms of this model have become commonplace; my main point here is that allowing Google to set up an urban innovation hub in the Eastern Waterfront would have placed enormous pressure on the federal and Ontario governments to become champions of the Google business model.

Sidewalk Labs and Waterfront Toronto were always up front about wanting to get into the smart city market. If they had been successful, the project would have been Canada’s de facto national champion in that market. As a result, governments would have been under excruciating pressure to adapt Canadian data and economic policy to serve Google’s ends, even if these ends were not in the interests of the wider economy or citizens’ basic rights. The debate we need to have on this issue would have been settled by facts on the ground.

We should also be clear about the nature and riskiness of this bet. One of the biggest knocks against Sidewalk Labs, which that The Star never took seriously, is that Google has no experience in this field. Much is made – including by Cohn – of Google’s outsized stature in the digital economy, and pretty much every Quayside cheerleader treated Google’s involvement as a sure bet. But in reality Google is a newcomer to the smart-city market. Companies like IBM have a by-now decade-plus head start on them, to say nothing of decades of experience dealing with governments as clients. There’s a reason why IBM’s forays into the smart-city market haven’t made the same waves as Google’s.

One of the main things Sidewalk Labs wanted to do with Quayside was to create smart-city-related standards. Standards, by definition, are the rules that others have to follow. But you can be sure that other companies and organizations are not just waiting around for Google to show us the way; they’re trying to come up with standards of their own.

And Google could easily lose this battle. Remember Google Plus? Google Reader? This is not a company with a record of sticking with money-losing investments, whatever they claim.

In other words, Waterfront Toronto was not creating the conditions for “innovation,” or buying “innovation.” This tiny land-development agency, isolated from direct political influence, was tying a not-insignificant part of the Canadian economy to Google’s mast, gambling that Google’s standards would emerge victorious on the global market.

I’m not sure that’s a bet I would feel comfortable making.

For many of the same reasons, and since Canada’s data-governance frameworks are woefully out of date, the Quayside project ran the very real risk of giving effective Canada-wide data-standards-setting power to a land-development agency located in one city, isolated from political influence and with no experience in or mandate to deal with these issues.

Google itself would have had a de facto strong voice in this debate, thanks to Quayside. Waterfront Toronto did manage to wrest from Sidewalk Labs a promise that it would not lobby Canadian governments on data-governance issues. But Sidewalk Labs wouldn’t have needed to lobby directly if: a) its interests were aligned with Waterfront Toronto’s; b) other branches of Google could make the case; and c) Canadian policymakers could see what’s needed to make its bet on the smart-city market pay off.

DSAP’s Fraught Future

Lest there be any misunderstanding, Waterfront Toronto, a land developer, should not be in the business of setting data standards. Putting aside the – to me decisive – issue of the legitimacy of placing such an agency in this role, there’s the issue of competence. Waterfront Toronto’s expertise lies almost exclusively within its part-time, volunteer Digital Strategy Advisory Panel. Such a panel is no substitute for in-house expertise.

What’s more, beyond the fact that it is a volunteer, part-time panel, members run the risk of conflicts of interest in designing new projects, be they directly in the form of business interests that might benefit from future involvement on digital-innovation projects, or indirectly through the receipt of industry-based research funding. (This is why you need civil servants working on these issues.) This is not to say that DSAP should not be involved with Waterfront Toronto, but it would work best as a check on actual in-house expertise. It can’t be Waterfront Toronto’s digital-policy arm.

I hope that both Waterfront Toronto and DSAP seriously consider these issues as they decide what to do next with Quayside.

Dazzled by Data

I’m not going to deal much with the other questionable parts of The Star and Cohn’s analyses, except to say that they failed to pay serious attention to both the woeful inadequacies in Sidewalk Labs’ plan and Waterfront Toronto’s back-to-front governance failures. Cohn writes:

Some (but by no means all) urban planners were dismissive of Sidewalk Labs, lampooning its lack of experience in construction and real estate development (just like the smart money mocked Google and Yahoo a generation ago when the Yellow Pages seemed unbeatable).

Nothing like deploying vague generalities to dismiss concrete criticisms.

I would invite Cohn to dip into my MIDP analysis at random and tell me which proposals he thinks are well-considered and which ones aren’t. Or maybe, to make it simple, he can tell me why we should trust a company that spent twice as many pages describing how a smart thermostat works as it did outlining the revolutionary power grid it planned to build. Or maybe he can share a list of which companies with no track record he’d like to build Toronto’s critical infrastructure.

And on governance, maybe The Star could explain why, exactly, they proved so keen to sign on to a plan that was gutted in October and reduced to a list of various technologies in February, all without Waterfront Toronto or Sidewalk Labs having done any substantive economic, environmental or social assessment on the amended report.

I think these opinions are likewise grounded in the incorrect assumption that this was primarily a physical urban-development project, mixed in with an unstated belief that big data is the answer to all our problems and that tech companies can do magic.

Hatred of Toronto’s developmental status quo is completely understandable, but why would anyone think that a search-engine/advertising company (whose product, BTW, is much closer to the Yellow Pages than it is to urban planning) could plan a city? What about this am I still not getting?

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No Longer Liveblogging Sidewalk Labs’ MIDP, Entry 50: Coda

And just like that, it ends, with Sidewalk Labs, the company that bragged how Google’s deep pockets allowed it to play the long game, that six months ago said it was in it for the long term, turning its back on the Quayside project. CEO Daniel L. Doctoroff claims “economic uncertainty” related to the global pandemic, which, I don’t know. The Toronto waterfront remains some of the most valuable undeveloped urban land in North America, and post-pandemic, a recession-scarred Toronto, you’d imagine, would be quite receptive to the promise of new economic investment.

Doctoroff’s letter has all the markings of an exercise in saving face, but that shouldn’t be a surprise. It’s been clear for a while now that this project was being maintained by a combination of bureaucratic inertia and the extent to which both organizations had bet the farm on this obviously flawed project. Which isn’t to say that its collapse was foreordained; personally, I figured they’d get something, no matter how unwieldy, across the finish line (see: face-saving).

In a just-published article in The Conversation, Dr. Natasha Tusikov and I reflect on some of the policy lessons this debacle can teach us. After all, there’s no shame, necessarily, in failure: Waterfront Toronto got in over its head with Sidewalk Labs and the original RFP. These things happen.

What’s less forgivable is the failure to learn from these mistakes. Dr. Tusikov, I and many, many others identified these issues very early on. But instead of listening to people who actually knew what they were talking about, instead of following fundamental good governance principles, Waterfront Toronto at every turn obfuscated, deflected and denied. I’ve detailed numerous examples over fifty-plus posts, totalling over 100,000 words, but just to remind you, here are a few greatest hits:

  • Claiming a children’s day camp as a form of public consultation.
  • Months after the (secret) Framework Agreement had been signed, appointing a part-time, volunteer Digital Strategy Advisory Panel to provide a sheen of legitimacy to an agency with no digital expertise. And then failing to give them the time to do their analyses – not that a part-time panel can make up in any way for the absence of skilled in-house analysts.
  • Holding a whirlwind July 2019 “consultation” on the 1,500-page Master Innovation and Development Plan, before anybody – including its own analysts – had fully digested this monstrosity.
  • Reducing the consultations to the status of a sideshow by issuing its own demands (the real demands) before even collating the responses.
  • The October 31, 2019, agreement with Sidewalk Labs, which picked-and-chose a list of technologies from the MIDP, called it a plan, and claimed that they had amended the MIDP, without releasing an amended text. Or a (non-existent, or at least inconsequential) revised economic, social or environmental analysis.
  • And the original sin, in the RFP, engaging in a co-governance venture in the first place, then claiming, upon the release of the MIDP, that Waterfront Toronto was now supervising Sidewalk Labs (despite the governing Plan Development Agreement stating they were in a joint relationship), and then, post-October 2019, they were back to working together again.

The tragedy is that the lessons that Dr. Tusikov and I (with an assist from Dr. Zachary Spicer) point out were obvious a few months into the project. This project should have been shut down the moment former Waterfront CEO Will Fleissig was shown the door in July 2018. Because of Waterfront Toronto’s … hubris? ignorance? arrogance? … everyone who correctly saw the Quayside disaster for what it was has had to spend the last two years playing defence instead of using our skills to promote positive change.

Waterfront Toronto needs to go under the microscope

The three levels of government responsible for Waterfront Toronto need to undertake a serious investigation into every aspect of what can only be seen as a colossal governance failure on its part. The Auditor General of Ontario has pointed out substantial structural flaws, and the extent to which it has engaged in stringing the public along in this process should be very concerning to anyone interested in good governance.

But now that it’s over, hopefully Sidewalk Labs’ departure will allow the people who have devoted so much time to this project to go and build something positive, rather than spending our time trying to avert disaster.

Final kudos

It’s somewhat ironic that the two events that most set this endgame into motion were the election of Waterfront Toronto nemesis Doug Ford (which led to the shaking up of Waterfront Toronto’s Board) and a global coronavirus pandemic. But, of course, it wouldn’t have gotten to this point without the hard work of many activists, most notably Bianca Wylie and the #BlockSidewalk coalition. As Dr. Tusikov and I point out in The Conversation, the Quayside project had implications that reached far beyond Toronto; for that reason alone, Wylie and #BlockSidewalk’s activism should be mentioned in the same breath as the activists, including Jane Jacobs, who thwarted the Spadina Expressway in the late 1960s.

While the Digital Strategy Advisory Panel and its members ran the real risk of being co-opted by Waterfront Toronto, potentially endangering their own reputations, their critiques were invaluable in giving reporters an “official” voice to quote in their stories. After all, it’s much harder to dismiss criticisms coming from inside the house. In the business community, Jim Balsillie is another person who has done more than his fair share to highlight the myriad problems with this project.

Edited to add: And I can’t believe I almost forgot to mention the principled resignations of Julie Di Lorenzo (from Waterfront Toronto’s Board), and Saadia Muzaffar and John Ruffolo (from the Digital Strategy Advisory Panel). The pressure to go along to get along should never be underestimated: It takes courage to stand up for your principles in the face of wrongdoing.

Finally, shout-out also to the handful of academics who did their jobs in critiquing an obvious flawed project, even when it seemed like we were rolling a boulder up a hill. This is what we get paid for.

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No Longer Liveblogging Sidewalk Labs’ MIDP, Entry 49: A letter from Sidewalk Labs CEO Dan Doctoroff

At The Conversation, Dr. Natasha Tusikov and I share a few thoughts on the policy lessons learned from the Quayside debacle. Reposted below:

Sidewalk Labs’ smart-city plans for Toronto are dead. What’s next?

On May 7, the Google company Sidewalk Labs announced that it was withdrawing from its partnership with Waterfront Toronto, and its plans to create a smart-city neighbourhood called Quayside.

The surprise announcement — attributed by Sidewalk Labs CEO Daniel L. Doctoroff to “unprecedented economic uncertainty” produced by the current COVID-19 pandemic — brings to a close one of the most bizarre and ill-conceived policy debacles we’ve ever come across.

It is hard to exaggerate the extent to which the entire Quayside development was not just a mess, but an obvious mess. This was a multi-billion-dollar deal between a land-development agency with no previous experience with foundational smart-city issues like data and intellectual property and a tech company created in 2015, with no track record in urban development.

Built on data and secrecy

Smart cities are built on data, yet Waterfront Toronto and Sidewalk Labs proved extremely reluctant to even discuss data governance issues almost a year into their partnership. This, even though Sidewalk Labs’ main, if not only, competitive advantage is that it is an affiliate of Google, the world’s pre-eminent data company.

And when it came time to produce a plan, Sidewalk Labs instead delivered an orgy of mandate-exceeding ideas thrown together in a glossy, four-volume, 1,500-page sales brochure.

The Quayside project comprised over two million square feet of developable space and four hectares of public space. (Sidewalk Labs)

This was a project shrouded in secrecy, engulfed in scandals, featuring a governance style that could most charitably be described as “making it up on the fly.”

Significance of withdrawal

The Quayside debacle matters for all Canadians in two important ways.

First, Canada’s underdeveloped data governance framework would have meant that Waterfront Toronto, a land-development agency isolated from direct public accountability, would have had the power to shape subsequent and consequential Canadian data governance regulation.

Second, Sidewalk Labs’ presence in Toronto would have effectively committed Canada to a digital economic-development policy framework centred on a single foreign data company. Canadian policy-makers would have been under enormous pressure to regulate in the best interests of Google, rather than Canadians and Canadian tech firms. While this mentality worked well for Canada in building a manufacturing base, an economy based on intangibles such as data and intellectual property doesn’t work the same way.

Lessons for future projects

Even in failure, Quayside can teach us lessons about how to deal with the growing number of projects that have data or intellectual property components. We have the opportunity to design digital infrastructure policies that will contribute to our well-being. Some of the most important lessons (developed with our colleague, political scientist Zachary Spicer) include:

Policy-makers need to take data and intellectual property seriously. Data is used to determine everything from traffic flows to access to welfare. It is economically valuable in and of itself, as is intellectual property.

Don’t make policy with a vendor. Waterfront Toronto’s original sin in its March 2017 request for proposals was to share policy-setting on crucial issues like data and intellectual property with a private company. This is not just a problem for public accountability, but can lead to fundamental conflicts of interest when it comes to deciding who should control data and what should be done with it.

Develop data and intellectual property frameworks before entering partnerships with private entities. Waterfront Toronto’s other major error was not understanding the importance of data and intellectual property at the beginning. In a knowledge-based economy and society, data governance is a fundamental issue affecting economic development and fundamental human rights. Governments need policies to deal with these issue, and while there have been some moves on this front, we are woefully behind where we should be.

Develop digital expertise at all levels of government. In a scathing 2018 report on Waterfront Toronto, Ontario’s Auditor General concluded that neither Waterfront Toronto nor the province of Ontario had the expertise to deal with smart-city issues. This has to change, at all levels. We need people who understand how the digital economy is different from a manufacturing economy, and the related social policy issues.

Rethink the role of private platforms. Similar to platforms in other areas, Sidewalk Labs’ fundamental idea was to make itself indispensable to the delivery of public services. We need a broader conversation about the desirability and long-term viability of for-profit private platforms delivering public services, from health and transit to housing.

Finally, urban development should start with the community and avoid “technological soultionism.” Sidewalk Labs started with a set of cool tech that they tried to convince Torontonians they needed. Instead, cities need to start by asking residents to identify their needs and then consider all possible options without assuming that the answer to every problem involves big data and new technology.

Developing future policy

The two-plus years Waterfront Toronto spent pursuing this folly has left the Quayside project back at the starting line, but there’s no reason why we can’t learn from its mistakes.

We now have the opportunity to carefully develop smart-city policies in consultation with Canadians that will improve our standard of living and quality of life.

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Once more, with feeling: Facebook’s new Oversight Board continues to be an attempted end-run around actual regulation

Of course it will be a “reputational shield,” as The Guardian puts it. That’s the whole point of these types of exercise. So long as Facebook makes the rules, it holds all the cards that matter.

Global platform governance is an issue area in dire need of more International Political Economy analysis.

Reposting some comments from Twitter:

No, Facebook’s oversight board does not solve its legitimacy problem.

I wrote about how to evaluate such platforms, and FB’s board in particular, in this paper.

Global #platformgovernance is an example of Dani Rodrik’s global governance trilemma: You can only have two of the following three: democratic governance, national sovereignty and hyperglobalization.

With its oversight board, FB has chosen hyperglobalization — one ruler for everyone — and the (neutered) nation-state, who will have to take whatever Facebook decides. So whatever legitimacy this board has, it’s certainly not democratic.

Instead, Facebook’s strategy is to claim legitimacy for its plan and itself by saying that it’s going to rely on human-rights experts. Which sounds fine; after all, you’re not against human rights, are you?

The problem here is the same one we find in pretty much every other area of global economic governance, namely that not only do “experts” have honest policy disagreements, but different societies have different views on what the means and ends of policies should be.

In his excellent and highly readable book, The Globalization Paradox, Rodrik points out that European and American policymakers have very different tolerances for risk in their financial markets. Who’s correct? That’s the point: it’s in the eye of the beholder.

Global legitimation via expertise only works with shared agreement over both means and ends. You don’t have that in most areas of economic policy, and you certainly don’t have it when it comes to platform regulation.

(I note in particular that Facebook lumps Canada in with the United States, with the US having 25% of all board members. Fun fact: The two societies have VERY different views on speech regulation.)

So how do you adjudicate between honest but potentially irreconcilable differences if you can’t rely on experts? Rodrik argues convincingly that in economics, you should leave countries with enough policy space to set their own way if they believe it’s necessary.

This is the exact opposite of Facebook’s (and every global platform’s) approach.

And once more, with feeling: The key issue isn’t whether you’re basing your system on “international human rights”, but who defines what international human rights means. There can be legitimate differences regarding how to legislate “international human rights.”

For example, one human-rights norm that Facebook and its supporters conspicuously and consistently ignore: the right to democratic self-determination. In the face of honest disagreements, who gets to decide? In this case, it’s Facebook initially and then it’s rule by experts.

After all, courts don’t have legitimacy just because they’re transparent and follow the rule of law; it’s because they’re grounded in a democratic system. This board has no such legitimacy.

Facebook’s advisory board is what it always has been: A transparent attempt to stave off actual regulation by (democratic) nation-states. Because at the end of the day, somebody always calls the shots. I’d rather have that person face some sort of (democratic) accountability.

Finally, so much of what’s written in this area could be improved by some exposure to some International Political Economy. Rodrik’s got some useful insights, and if you want to understand power and platforms, check out Susan Strange’s States and Markets.

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Rethinking the world

Some useful suggestions from Aisha Ahmad on how academics should work in these unprecedented times, none more helpful than her advice to use the current moment to question our assumptions about how the world works:

In the spirit of distraction, and in addition to my never-ending series of Quayside posts, I’m going to try to use this blog to highlight interesting articles that get me thinking about everything that’s happening. I’m doing this primarily for my own education, but hopefully some of you will find it interesting or useful and not too banal or obvious.

If these entries don’t do it for you, I recommend my old university friend Giles’ blog, One-Way Mirror, where he mostly reviews science fiction and fantasy books and films. He’s a great writer.

First up is Branko Miloanovic: The Real Pandemic Danger Is Social Collapse:

“The world faces the prospect of a profound shift: a return to natural—which is to say, self-sufficient—economy. That shift is the very opposite of globalization. While globalization entails a division of labor among disparate economies, a return to natural economy means that nations would move toward self-sufficiency.”

We were already seeing moves in this direction: a renewed focus on national industrial policy, particularly as it relates to artificial intelligence and digital policy more generally (what I’ve been calling digital economic nationalism), the increasing tendency to identify tech companies by their country of origin, and the China-US cold war over tech policy and 5G. Then there’s the question of climate change, which you’d think will eventually have an effect on the viability of air transportation and international cargo shipments.

Add to that the declining relative power of the United States, the indispensable country in global governance, and you have a recipe for a shrinking world even without the novel coronavirus.

Societal collapse, warns Milanovic, is not an impossibility in the U.S., or elsewhere:

The movement to natural economy would be driven not by ordinary economic pressures but by much more fundamental concerns, namely, epidemic disease and the fear of death. Therefore, standard economic measures can only be palliative in nature: they can (and should) provide protection to people who lose their jobs and have nothing to fall back on and who frequently lack even health insurance. As such people become unable to pay their bills, they will create cascading shocks, from housing evictions to banking crises.

Even so, the human toll of the disease will be the most important cost and the one that could lead to societal disintegration. Those who are left hopeless, jobless, and without assets could easily turn against those who are better off. Already, some 30 percent of Americans have zero or negative wealth. If more people emerge from the current crisis with neither money, nor jobs, nor access to health care, and if these people become desperate and angry, such scenes as the recent escape of prisoners in Italy or the looting that followed Hurricane Katrina in New Orleans in 2005 might become commonplace. If governments have to resort to using paramilitary or military forces to quell, for example, riots or attacks on property, societies could begin to disintegrate.

Canada’s position in such a world: a small country in the North American region whose world will shrink largely to the continent we share with a superpower that is working through a lot of issues at the moment. There’s a good chance that we’re about to enter a new era in Canada-US relations, if we haven’t done so already.

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