Competition in the public interest

As hard as it may seem to believe, it wasn’t so long ago that the government of Canada rejected competition in telecommunications services. I moved back to Canada to join the team that was proposing the introduction of facilities based competition back in 1989. We worked for a few years, building business models and assembling evidence to prove, among other things, that facilities-based competition in telecommunications services was in the public interest.

In the present proceeding, … in order for the Commission to determine if approval of the applications is in the public interest, it must assess the advantages and disadvantages of various scenarios for lowering long distance rates.

That’s right. The CRTC had to assess the advantages and disadvantages of various scenarios for lowering prices.

Read section II of Decision 92-12 – Advantages and Disadvantages of Competition.

It wasn’t always self evident to the regulator. We had to demonstrate that, among all the various scenarios for lowering consumer prices, our approach was the best.

That decision – indeed the 2-year long proceeding that led to that decision – transformed my career and significantly influenced my views on the benefits of facilities based telecom competition.

Over the past 20 years, the federal government has continued to endorse market forces over regulation. In December 2006, a policy direction was sent to the CRTC by Cabinet, requiring

(a) the Commission should

  1. rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and
  2. when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives;

Further, the 2006 Policy Direction states

(b) the Commission, when relying on regulation, should use measures that satisfy the following criteria, namely, those that

  1. specify the telecommunications policy objective that is advanced by those measures and demonstrate their compliance with this Order,
  2. if they are of an economic nature, neither deter economically efficient competitive entry into the market nor promote economically inefficient entry,
  3. if they are not of an economic nature, to the greatest extent possible, are implemented in a symmetrical and competitively neutral manner, and
  4. if they relate to network interconnection arrangements or regimes for access to networks, buildings, in-building wiring or support structures, ensure the technological and competitive neutrality of those arrangements or regimes, to the greatest extent possible, to enable competition from new technologies and not to artificially favour either Canadian carriers or resellers

To this day, there is a section that discusses compliance with the Policy Direction in each decision by the CRTC that relies on regulation. For example, See paragraphs 397-401 in the Wireless Code issued just 10 weeks ago.

Now, these rules apply to the CRTC, not Industry Canada, but would it be unreasonable to expect the department to observe the same policy direction?

Do we support the principles of ensuring government regulations “neither deter economically efficient competitive entry into the market nor promote economically inefficient entry”?

Can we confirm that measures promote “innovation and investment in and construction of competing telecommunications network facilities”?

2 thoughts on “Competition in the public interest”

  1. You might equally ask whether Industry Canada adheres to its own Spectrum Policy Framework ( which is the same vintage as the direction issued to the CRTC. It reads as follows.

    Enabling Guidelines
    (a) Market forces should be relied upon to the maximum extent feasible.
    (b) Notwithstanding (a), spectrum should be made available for a range of services that are in the public interest.
    (c) Spectrum should be made available to support Canadian sovereignty, security and public safety needs.
    (d) Regulatory measures, where required, should be minimally intrusive, efficient and effective.
    (e) Regulation should be open, transparent and reasoned, and developed through public consultation, where appropriate.
    (f) Spectrum management practices, including licensing methods, should minimize administrative burden and be responsive to changing technology and market place demands.
    (g) Canada’s spectrum resource interests should be actively advanced and defended internationally.
    (h) Spectrum policy and management should support the efficient functioning of markets by:
    • permitting the flexible use of spectrum to the extent possible;
    • harmonizing spectrum use with international allocations and standards, except where Canadian interests warrant a different determination;
    • making spectrum available for use in a timely fashion;
    • facilitating secondary markets for spectrum authorizations;
    • clearly defining the obligations and privileges conveyed in spectrum authorizations;
    • ensuring that appropriate interference protection measures are in place;
    • reallocating spectrum where appropriate, while taking into account the impact on existing services; and
    • applying enforcement that is timely, effective and commensurate with the risks posed by non-compliance.

  2. visitor 546732567

    they didn’t exactly follow the Framework for Spectrum Auctions either (for AWS or 700/2500).

Comments are closed.

Scroll to Top