The CRTC is holding an oral hearing next week, “Proceeding to consider the appropriateness of mandating certain wholesale high-speed access services.”
In other words, which facilities will the CRTC require phone companies and cable companies to unbundle and offer to competitors on a wholesale basis. Some competitors have suggested that the competitive industry is at stake in these hearings. I don’t think so. There are at least two options available to smaller ISPs should the CRTC rule against their proposals – and I would be happy to discuss these with my clients.
Is mandated access to wholesale high speed service in the public interest? I was the facilitator for an executive development session at University of Toronto yesterday. One of the presenters referenced a quote from Professor Emeritus Theodore Levitt of Harvard Business School:
People do not want quarter-inch drills. They want quarter-inch holes.
Having hundreds of competitors is not (or at least should not be) the objective of government policy. Rather, it is the competitive marketplace that deliversĀ benefits for consumers.
To paraphrase Professor Levitt, consumers don’t want lots of competitors; they want advanced, innovative services at a price they consider to be fair value. The policy and the regulatory framework needs to examine what is the right framework that encourages innovation and investment by various market participants.
Next week’s hearings will explore these issues and there needs toĀ beĀ focus on the what the proposalsĀ mean to consumers: residential and business.Ā
These issues are among many to be hotly debated and discussed at The 2010 Canadian Telecom Summit, opening in just 10 days, June 7-9 at the Toronto Congress Centre.
Your colleagues, clients and competitors will be there. Have you registered yet?
People do not want 1/4 inch holes – they want to break up the oligopoly.
Maximizing shareholder value is an anachronism of the 20th century. If it takes a mandate – that I generally oppose – then so be it. Bring some actual competition to the marketplace. “Hundreds” of competitors? Dubious.
Ned –
You may want to refer to the CRTC’s Communications Monitoring Report for statistical information about the industry. For example, near the beginning of Section 5.3 of the most recent report (2009), the Commission wrote:
That was the basis of my reference to ‘hundreds of competitors.’
Interesting. I had no idea there were so many. Is it safe to assume that virtually all of them are reselling DSL service?
DSL had it’s day, but the consensus in my circles is that cable ISP service is significantly better. So, we are left with no alternative to the local monopoly (Rogers).
I have never heard of this in Ottawa – are there other vendors who are able to resell Rogers ISP services via the cable infrastructure?
No response from anyone? So I’ll go ahead and assume that the cable system is completely immune to this entire discussion of wholesale services…?
One final question then: in the U.S. cable companies were granted regional monopolies by the regulatory bodies to incent them to accelerate their infrastructure build-out. Was a similar approach used in Canada or are the regional cable monopolies that exist here the end result of natural competition?