In December, Cabinet issued a policy direction to the CRTC that had a number of extremely relevant components, in view of the consultation process for the AWS spectrum.
- the Commission should
- rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and
- 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;
- the Commission, when relying on regulation, should use measures that satisfy the following criteria, namely, those that
- specify the telecommunications policy objective that is advanced by those measures and demonstrate their compliance with this Order,
- if they are of an economic nature, neither deter economically efficient competitive entry into the market nor promote economically inefficient entry,
Let’s focus on two of these: rely on market forces to the maximum extent feasible; neither deter economically efficient competitive entry into the market nor promote economically inefficient entry.
Is a spectrum set-aside for new entrants economically inefficient? To be consistent with its policy direction, should new entrants buy spectrum for its full value, competing openly against the existing carriers?
Any reduction in the amount paid for spectrum is lost revenue for the government. Should taxpayers subsidize competitive entry? If so, by how much?
If the new entrant can’t afford the full value of the spectrum, can they afford to build out the network? What is the impact of non-Canadian ownership restrictions on the auction? Should taxes subsidize spectrum speculators waiting for foreign investment restrictions to be lifted?
Questions to be addressed in the spectrum consultation.