Lessons from 30 years of competition

Later this week we’ll be marking the 30th anniversary of the CRTC’s landmark decision enabling competition in Canada’s telecommunications market.

Telecom Decision CRTC 92-12: Competition In The Provision Of Public Long Distance Voice Telephone Services And Related Resale And Sharing Issues, was released June 12, 1992. The regulatory process began with an application filed by Unitel in May of 1990. Regional public hearings took place across the country, and the main hearing, with sworn testimony and cross examination by all parties took place over 11 weeks, from April 15 to July 5, 1991.

Competition had been rejected by the CRTC previously. The benefits of a competitive marketplace for telecommunication had to be proved to be in the public interest. Competition didn’t arrive in Canadian telecom by government fiat; we had to demonstrate the benefits.

At the time, competitive telecom was relatively new in a very limited number of countries. I was recruited to return to Canada after spending a half dozen years in the US, following the 1984 break-up of AT&T. My job was to define the interconnection architecture and build the network capital investment plans to transform Canada’s telegram company into a competitive digital communications company. In the first couple weeks, I rewrote the company’s interconnect plan, so new entrants would interconnect as peers, not customers.

Presenting the new plan at a board meeting a few weeks later, I met Ted Rogers and CP’s Bill Stinson for the first time and the new interconnection plan was put through the wringer. My boss motioned for me to sit down, but the lawyers I had been working were sitting in the back of the room and they wanted me to keep going. Later, I was told that I was being tested. As we packed up, Ted came over and told me it was a really good presentation and he looked forward to hearing more the next month. My boss said. “If that was a good presentation, what do you consider to be a bad one?” As he walked back into the boardroom, Ted answered “Why, you know what a bad presentation looks like!”

Over the course of the next 18 months, we assembled volumes of evidence, and answered thousands of interrogatories. My personal briefing book was a 4 inch binder with 33 tabs. [As an aside, I ran across it recently and would be happy to donate it to a resource library, if anyone is interested.] We carried 2 shelves of back-up binders into the hearing room. And that was just for the network panel.

For the oral hearing phase, I was part of the opening panel, on the witness stand for the first week testifying about the interconnection architecture. The strategy was to put the network panel up first, based on a thought that it would be boring and chase the story off the news so that we could get down to the serious policy issues over the following 10 weeks. Personally, I thought we were more exciting than the economists!

It was a different era. Sworn testimony – I was affirmed. Full cross examination, without the ability to consult with our lawyers once on the stand. The Minto Suites was home to many of the out-of-town teams. Long days at the hearing on the Quebec side of the river would transition to long evenings, usually starting off with the sauteed mushrooms and refreshments at the hotel’s street level bar/restaurant.

Someday, I really should pull together more stories from those days.

A memorable moment from the hearing came when I finished testifying. I was chatting with our corporate head of law and the legal chief at Bell came over and complimented our panel. I was shocked. A couple days earlier, he was doing his best to trip us up and here he was telling our lawyer what a good job we had done. During the following week, SaskTel’s outside counsel, the late Willie Grieve, caught up with me at our hotel and asked if I could help him understand how our proposal worked. We were developing a model of “co-opetition”.

Those personal interactions indelibly reshaped my understanding of the regulatory process. Inside the hearing room, we could (and we would) vigorously advocate our positions, while still maintaining courteous, professional and even friendly relationships with the other team. It is like the way opposing teams line up to shake hands at the end of a hockey playoff series, demonstrating respect for their industry colleagues.

Those professional relationships were important as we moved into implementation. Every so often, an issue needed an escalation to avoid (or mitigate) a service affecting incident. It helped to have a relationship with my counterpart on “the opposing team.” Sometimes, it is helpful to resolve issues without resorting to the regulator.

Scratch that. It is almost always preferable to resolve issues without resorting to a regulatory filing. I think there is a lesson in there for many of today’s industry participants.

I wrote a nostalgic post 5 years ago that you may find to be worth a fresh look.

Last week, I contacted the members of my small but high energy team of bright young engineers who had all been recruited from Nortel and Bell Labs to join what was then called CNCP. All of them were under 30, reporting to me when I still had a full head of dark hair at the age of 32. It was a memorable time together, working ridiculously long hours, creating bonds that keep us connected 30 years later. I am proud of what we accomplished and the leadership roles in the global telecom sector that each member of our team assumed after we moved on from Unitel.

There were notable industry leaders who had emerged from among the CRTC staff involved in that proceeding. But that is another story for another time.

As I have mentioned before, I will sometimes be driving on a highway here in Canada, video-chatting with my daughter who is on a high-speed commuter train halfway around the world, without either of us having to think about the cost. I don’t ever take that for granted. The miracle of connectedness is possible thanks to more than a century of investment and innovation by some people with whom I am honoured to have worked.

Ubiquitous affordable communications haven’t always been the norm.

During the regional CRTC hearings in 1991, we divided up the various provincial and territorial capitals in order to have a company representative sit with our lawyer, to listen as members of the public delivered comments to a mini-panel of Commissioners. I attended the Vancouver and Whitehorse hearings on the company’s behalf. As an aside, let me note that the weather in Vancouver in February is a little milder than Whitehorse, but I am not sure have seen any place prettier than the Yukon in Winter. There wasn’t a lot of air connectivity to Whitehorse so we ended up spending a few days there for a half-day hearing. After settling into my hotel room, I remember walking into the lobby where our lawyer was chatting with a CRTC Commissioner before we all set out for adventure during the few hours of daylight. I opened the conversation saying “did you see the long distance phone rates listed in the front pages of the Whitehorse phone book?” Surprisingly, neither of them knew that it cost around $3 per minute to call Toronto. In 1991, that would have taken an hour’s work at minimum wage to pay for a two minute call.

We changed that for most Canadians.

Thirty years ago this coming Sunday, Canada created the regulatory framework that enables today’s competitive environment for communications connectivity.

I’ll be thinking of my colleagues and friends among those who were involved, from all sides of the proceeding, applicants, respondents, intervenors and the Commission. I invite you to add your reflections in the comments section.

Congratulations on the past 30 years. As Ted Rogers would say, “the best is yet to come.”