Mark Goldberg


Is Canada endangering innovation?

The Montreal Economic Institute released a report this morning examining “The State of Competition in Canada’s Telecommunications Industry“.

Last year, the 2014 edition of the report concluded Ottawa is harming consumers of telecommunications services by encouraging artificial competition. That report countered the oft-repeated mantra that Canadians pay noncompetitive prices for low quality telecommunications services. The report argued that interventions aiming to increase the number of players through subsidies and mandated access were not likely to have the intended effects and might instead jeopardize investments and innovation.

The 2015 report has 4 key sections:

  • Chapter 1: How Does Canada Measure Up?
  • Chapter 2: An Update on Wireless Competition in Canada
  • Chapter 3: Mandatory Sharing of Broadband Networks: Fostering or Hindering Innovation?
  • Chapter 4: The Impact of Technological Changes on Competition in the Telecommunications Sector

So, how does Canada measure up? According to the report, Canada has among the world’s most advanced and efficient wireless networks. “Canadians continue to be among the biggest consumers of telecommunications services in the world, an indication that we enjoy competitive, quality services.”

The authors suggest that “The government and the CRTC should stop emulating the failed policies of Europe and revive Canada’s historically less interventionist wireless regulation, which has served consumers well.”

The conclusion is entitled “Endangered Benefits.”

Canadians continue to enjoy one of the most advanced telecommunications networks on the planet, and while prices are higher than in Europe, they are lower than in the United States and Japan. This explains in part why Canadians are among the biggest consumers of telecommunications services in the world.

These benefits, however, are endangered. The numerous interventions carried out by the federal government to encourage the establishment of a 4th wireless telephony player across the country could end up hurting consumers by undermining innovation in this industry.

The most appropriate public policies are those that will allow Canadian telecommunications companies to face this global competition and that will offer the best investment climate. The debate over a fourth wireless player, and the government’s interventions in the matter, which continued this year, are just a costly distraction that could well backfire for Canadian consumers.

How do lawyers and economists examine the impact of regulation on investment and innovation? That is precisely the subject of one of the panels at The 2015 Canadian Telecom Summit, taking place in just over 3 weeks, on June 1. The session, “Competition in Telecom: Net Neutrality and Innovation,” brings together leaders from Canada and the United States and will feature:

  • Dvai Ghose (moderator), Global Head of Equity Research at Canaccord Genuity, has consistently been ranked as an all-star Canadian Telecom and Cable Services Analyst by Brendan Wood International. He has also been ranked the number one equity analyst for stock picking and EPS estimate accuracy in the Telecommunication sector in North America by Starmine and Forbes Magazine.
  • Ariel Katz is an Associate Professor at the Faculty of Law, University of Toronto, where he holds the Innovation Chair in Electronic Commerce. His general area of research involves economic analysis of competition law and intellectual property law, with allied interests in electronic commerce, pharmaceutical regulation, the regulation of international trade, and particularly the intersection of these fields.
  • John Lawford is Executive Director and General Counsel of the Public Interest Advocacy Centre (PIAC), a national non-profit organization that provides legal and research services on behalf of consumer interests, and, in particular, vulnerable consumer interests, concerning the provision of important public services.
  • Len Waverman has been a professor of economics at the University of Toronto and the London Business School and Dean of the Haskayne School of Business as well as professor of strategy at the University of Calgary. He is currently Dean of the DeGroote School of Business.
  • Christopher Yoo, Director, Center for Technology, Innovation & Competition at University of Pennsylvania Law School, has emerged as one of the leading authorities on law and technology. His research focuses on how the principles of network engineering and the economics of imperfect competition can provide insights into the regulation of electronic communications.

This session should be interesting and provoke considerable discussion.

Have you registered yet for The 2015 Canadian Telecom Summit?

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