Month: September 2022

Through the weekend, I saw an interesting exchange on Twitter related to a Chicago Law Review paper by Herbert Hovenkamp, a professor at University of Pennsylvania Law and the Wharton School of Business. The paper postulates “when antitrust pursues a goal of higher output in product markets it is benefitting labor and consumers alike.”

According to Professor Hovenkamp,

Both antitrust’s neoliberal right and its Progressive left have advocated policies that are harmful to labor. The right did so by developing a cynical vision of “consumer welfare” that incorporated producer profits into the definition and advocated for lower output in product markets. The left has done the same thing with its hostility to large firm size, even when dictated by scale economies or network effects, and its protection of small business.

The Twitter exchanges he had through the weekend looked at a number of major anti-trust cases in the US, including AT&T, Google and Facebook. On AT&T, Professor Hovenkamp said, “I cannot identify a single upside from the regional separation and as far as I know no one has. The interconnection obligations are a completely different matter.”

But the post that caught my eye was his reply to a lawyer who suggested splitting Facebook-parent Meta vertically and horizontally to create more competitors.

“More competitors is not the measure of more competition.”

I thought that statement was worth capturing, especially in view of the various mergers and acquisitions under examination in Canada’s telecommunications market.

I have had an interest in looking at demographics ever since my graduate research paper examined the impact of Quebec politics on the growth of a subset of Ontario’s population.

That may explain why I was particularly taken by a research report released by Scotiabank Global Equity Research that looked at Canada’s increased rate of immigration and the impact on the mobile services market.

I was particularly interested in these key points raised in the Scotiabank report:

Strong wireless loading in Q2 likely not a one-time event. Net wireless loading for publicly listed Canadian service providers totaled 450K in Q2, the highest level for a second quarter in the last 15 years. This level of wireless loading is usually reserved for a normal Q3 or Q4 (i.e., the back-to-school and winter holiday seasons). In “normal” times, Q2 usually saw 200K-350K net new activations.
…
Canadian immigration surge fueling recent population growth. Interestingly, the Canadian population grew by 128K in Q1 2022 (the last data set published by Statcan), the highest level for a first quarter in at least the last 15 years. Of that increase, 127K came from new international migration, of which, 114K were due to new permanent residents. The increase in new permanent residents is a proactive government directive that is expected to boost new immigrants to around 443K per year over the next 3 years from around 300K on average in the last 7 years. Just to frame the impact of immigration on population growth, the Canadian population grew by 1.3% yoy in 1Q22, excluding immigration the growth would have been 0.1%.
…
Some companies will feel the benefit more than others. Population growth was not even across Canada. Ontario and British Columbia saw an outsized increase compared to Quebec which was closer to recent levels. The reason we highlight these divergences is due to the higher market share that Rogers has in Ontario and TELUS in BC in normal times. This also could explain why Quebecor did not see a material increase in yoy net loading in Q2 vs previous years as population growth in Quebec has not increased to the same extent as Ontario or BC.

To what extent are these trends contributing to business strategies, including M&A activity, among national telecommunications companies?

Last week a number of Canadian regulatory and policy folks talked amongst themselves to craft a letter that was sent to Minister of Heritage Pablo Rodriguez, and the Minister of Housing and Diversity and Inclusion Ahmed Hussen.

The letter was an unusual display of unity, as indicated in a tweet from Teksavvy’s Andy Kaplan-Myrth: “This may be a surprising list of individuals to sign a letter together — we are rarely if ever on the same side of issues. That’s how clear, important, and nonpartisan this was.”

The letter itself opens with an introduction to the group. “We are a group of Jewish Canadian communications lawyers and professionals. We are writing in our personal capacities to express our concerns with revelations that Canadian Heritage chose to retain a person with a demonstrated history of antisemitic statements.”

The group included people from Bell, CCSA, Distributel, Rogers, Teksavvy, TELUS, a former CRTC vice-Chair, academics and lawyers from small boutique firms as well as large Bay Street firms.

While we are happy to learn that the government has terminated CMAC’s funding through this program and that there will be a review of the program from which CMAC received funding, there has been no indication that the government will undertake a broader review of its processes across Canadian Heritage or other departments, and to date no Minister and no senior public servant has taken responsibility for this affair.
…
In your publication “Building a Foundation for Change: Canada’s Anti-Racism Strategy 2019–2022“, you state that “The Government of Canada must take a leading role addressing systemic racism and discrimination when found to exist within our federal institutions and in public policies, programs and services.” We agree, and ask that in the spirit of this commitment, you commit to the following actions:

1. Apologize and take responsibility on behalf of Canadian Heritage for retaining Mr. Marouf to provide anti-racism training;
2. Undertake the inquiry into how this occurred in consultation with Canadian Jewish communities, and report publicly on your findings; and
3. Provide a detailed plan on how the Government intends to include Jewish Canadians in its anti-racism strategy going forward.

I found it particularly gratifying to see these regulatory and policy colleagues set aside their differences to come together to craft a strong message to these two cabinet members.

I thank them.

If you want to provide your support, please consider signing this petition.

---

In order to bookmark a few articles about the affair, let me point you to:

• Jonathan Kay in Quillette: The Line Between Anti-Racism and Racism Keeps Getting Fainter
• Joshua Lieblein in The Line: Anti-Semitism from an anti-racist? How unusual.
• Rex Murphy in the National Post: The Trudeau government’s hypocritical stance on hate and its targets
• Michael Geist on his blog: Silent No More: Liberal MP Anthony Housefather Calls on All 338 MPs to Speak Out on Anti-Semitism and Ensuring No Government Funding for Anti-Semite
• Anthony Furey (with Jonathan Kay) podcast on National Post Full Comment: Oops, we hired a raving bigot to teach anti-racism
• Barbara Kay in the National Post: The private organizations trying to get to the bottom of the Marouf affair
• Dan Donovan in Ottawa Life Magazine: Why Jewish people in Canada should fear the Trudeau government.
• Marie Woolf in the Globe and Mail: CRTC launches payment review over Laith Marouf affair
• Robyn Urback in the Globe and Mail: Why was the government silent on Laith Marouf’s antisemitic tweets for an entire month?
• Marie Woolf and Marieke Walsh in the Globe and Mail: PM’s office knew of derogatory tweets a month before contract was cancelled
• Michael Geist on his blog: Government Funding For an Anti-Semite: They Knew For a Month. And Did Nothing.