Mark Goldberg


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The CEP on FDI

In his June 7 remarks to open The 2010 Canadian Telecom Summit, Industry Minister Tony Clement launched a consultation process to examine options for liberalizing foreign direct investment in the telecommunications sector.

The received comments are now posted on Industry Canada’s website and make for interesting reading. Some of the submissions show some strategic gaming, with parties more concerned about doing damage unto competitors, rather than simply being concerned about their own direct benefit.

There are a bunch of submissions categorized as petitions, with emails that were generated by the Communications, Energy and Paperworkers Union. CEP had its own paper that led with an interesting point that made me smile:

Although well-publicized research by the OECD has fostered the view that Canadian mobile telephone rates are substantially more expensive than in other countries, what is less well-known is the fact that the study’s serious methodological flaws led to flawed conclusions.

CEP undertook new research to correct the OECD’s study’s flaws, and found that based on Canadians’ actual wireless usage, only 4 of 28 OECD countries have mobile prices that are lower than Canada’s.

They didn’t need new research – we found the same thing in our report last year “Lagging or Leading.” I’m not sure we would agree with the conclusions that are drawn by CEP relative to that study, but it is gratifying to see their support. [CEP rejected the 3 options set out by Industry Canada and concluded that no changes are required].

The body of the CEP filing opens with a history of telecom ownership in Canada, examining the phenomenon of the provincial crown corporations. The document and its global comparisons are worthwhile reading.

Too often, it is easy for us to focus on the submissions from the big carriers and the trade press has also talked about submissions from the new wireless entrants. But we need to remember that this was a public process – not just a canvassing of the telecom industry.

The status quo is not a viable option, and CEP might have carried more political weight had it sided with the CRTC’s proposal: the 49% solution set out as option 1.  But be sure to take the time to read CEP’s paper for an eloquent, fact-based set of arguments from an organization representing 120,000 Canadian workers.

2 comments to The CEP on FDI

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  • Vishal Malik

    Hi Mark:

    I have a question for which I can’t find an answer anywhere. I’d appreciate if you could provide some direction in this regard.

    We always talk about Canada’s low population density when we talk about telecom prices etc. However, that is a wrong metric to look at, since no telecom network covers our entire territory. For example, the actual area covered by Rogers wireless is much smaller than that covered by Verizon Wireless.

    Can I find somewhere a comparison of the “effective population density” served by international telecom operators?

    Thank you.

    Vishal Malik