Mark Goldberg


Should Canada create a telco crown?

A Canadian union is calling for the Canadian government to get into the competitive telecommunications business:

The Communications, Energy and Paperworkers Union of Canada is calling on the Harper government to rescind advantages offered to Verizon Communications to set up as a fourth major carrier and to instead establish a Crown Corporation to fulfill this objective.

Has it really been such a long time that most of the planet got rid of their government owned telecom monopolies? They were called PTTs – agencies that ran the post office, telephone and telegraphs on a monopoly basis for most of the world. New housing developments and business parks could wait for years before new lines were run, unless proper political connections were had, strings were pulled, contributions were made.

A tweet suggested that we look at roads, power and water as examples of how government runs critical infrastructure:

Look at our roads. As you sit in traffic and see construction taking place during rush hour, instead of at night, think about how customer friendly that approach is. As you drive through potholes, ask yourself if roads are really being planned, engineered and maintained on a just-in-time, or always-too-late basis.

Ask almost any Quebec resident how happy they are with the state of their roads and bridges.

Think about political interference in the construction and operation of electrical generation. Think about water and sewer lines cracking, flooding roads and causing sink-holes, well past their “best before” dates.

Let’s not forget the customer service call centres – those always friendly interactions when entering the country, renewing your health cards, passports, or paying your taxes.

There could be some cost savings for national security agencies if they are able to deal directly with another government department to access your call records. That should save time and money.

There can be exceptions. SaskTel provides an interesting model worth thoughtful study.

But we need to bear in mind that the introduction of wireless communications was an overwhelming success in many countries precisely because of the sorry history of government owned communications. As much as Canadians love to kvetch about their phone company, do we really want a government agency to take its place?

1 comment to Should Canada create a telco crown?

  • George Hariton

    It is worth remembering that the SaskTel network was built out largely through subsidies from long distance traffic between Ontario and Quebec, on one hand, and B.C. and Alberta on the other hand.

    I’m not aware of any jurisdiction where public ownership was superior to private sector ownership. That’s not to say that there is no scope for a government role. Provincial and local governments working with rural and remote communities have brought service to almost all Canadians, without the massive and wasteful subsidies we see in other countries. But actual delivery of services is best done by a competitive private sector.

    In my opinion, the union is not interested in strong competition, which leads to cost cutting and pressure on union members’ wages. The proposal for a government supplier is just a red herring.