Unintended consequences

Last week, Bell and Bell Aliant filed a cabinet appeal saying that a consequence of the CRTC’s Cybersurf speed-matching decision is to discourage investment in next generation FTTN networks. That appeal is similar to one filed the evening before by TELUS. There was also an appeal filed by MTS Allstream of 2 different CRTC decisions, dealing with wholesale access to unbundled ethernet. [Links to the various decisions can be found here.]

A general concern associated with regulation is the potential for unintended consequences to arise from intervention in the marketplace. This is why it is Canada’s official policy to rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives.

In his February speech to the Canadian Film and Television Production Association’s Prime Time conference, CRTC Chair Konrad von Finckenstein commented that the Commission is always particularly concerned about unintended consequences associated with its actions. Earlier this week, in the New Media proceedings, the Chair commented:

You know, we, like everybody else, avoid unintended consequences and when you just look at things through one lens, like in this case the broadcasting, you may have produced some consequence you didn’t want to because you didn’t look at the overall picture or you didn’t have jurisdiction for it.

The CRTC determination on matching speeds may have made sense through the lens of Section 27(2) of the Telecom Act:

No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

Keep in mind that Not all discrimination is forbidden. There is such thing as “just” discrimination.

In May 2006, the CRTC found that TbayTel had discriminated against its competitor, Superior Wireless, but its actions did not constitute ‘unjust discrimination’ under the Telecom Act. TBayTel was found to have treated the customers of Superior Wireless differently from the way it treats roaming customers of other carriers, however there was no ‘unjust’ discrimination, when considering the degree of competition in wireless services.

What constitutes a “sufficient degree of competition” in the services being examined? How can we be certain that there is an adequate measure of the degree of competition and that the statistics are reliable?

Had a similar lens been applied to examine internet services as the Commission used for mobile wireless in Decision 2006-33, would the outcome of the decisions under appeal have been the same?

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