Canadians benefit from some of the most advanced and efficient wireless and broadband Internet services in the world. Further, penetration and usage rates for newer wireless technologies like tablets, smartphones and LTE connections in Canada are among the highest for industrialized countries.
These are among the findings of The Montreal Economic Institute in the 2016 edition of its report on “The State of Competition in Canada’s Telecommunications Industry” [pdf, 5MB].
According to its authors, Martin Masse and Paul Beaudry, the publication of the report was motivated by the mistaken impression given by some observers that Canada’s telecommunications industry compares poorly with that of other jurisdictions.
The report attempts “to dispel the notion that Canadians pay uncompetitive prices for low quality services.”
It argues that government and CRTC interventions in the wireless and wireline sectors could lead to unintended consequences that might jeopardize investment and innovation.
The release is timely as parties prepare final written submissions for the CRTC’s Review of basic telecom services. The authors urge Ottawa to resist intervening in the broadband Internet sector as it has in the wireless sector.
Any CRTC attempt to declare broadband an “essential service” and to regulate and subsidize it would be a solution in search of a problem, as broadband is well on its way to becoming ubiquitous simply through the normal course of technology adoption.
The report charges that the CRTC’s wireline wholesale decision, under appeal to the Federal cabinet, ignores the lessons of Europe, “where two decades of network sharing regulations and an obsession with price competition has led to a decline in mobile revenues and underinvestment in network infrastructure.” The authors call for Cabinet to modify the CRTC’s decision, and in renewing a commitment to the 2006 Policy Direction, “remind the regulator that infrastructure deployment is key to Canada’s long-term economic prosperity and should be encouraged, rather than deterred.”
Interventionist policies aimed at helping smaller players gain market share can have harmful effects on innovation and weaken incentives to invest in and deploy new infrastructure.
The report concludes: “Canada already has dynamic and competitive markets in telecommunications, and there is no need for costly and counterproductive policies that merely promote artificial competition.”
In releasing the report, the authors endorse the Bell acquisition of MTS announced earlier this week.
These issues and much, much more will be explored at The 2016 Canadian Telecom Summit, taking place June 6-8 in Toronto. Have you registered yet?