Competition in the public interest

As hard as it may seem to believe, it wasn’t so long ago that the government of Canada rejected competition in telecommunications services. I moved back to Canada to join the team that was proposing the introduction of facilities based competition back in 1989. We worked for a few years, building business models and assembling evidence to prove, among other things, that facilities-based competition in telecommunications services was in the public interest.

In the present proceeding, … in order for the Commission to determine if approval of the applications is in the public interest, it must assess the advantages and disadvantages of various scenarios for lowering long distance rates.

That’s right. The CRTC had to assess the advantages and disadvantages of various scenarios for lowering prices.

Read section II of Decision 92-12 – Advantages and Disadvantages of Competition.

It wasn’t always self evident to the regulator. We had to demonstrate that, among all the various scenarios for lowering consumer prices, our approach was the best.

That decision – indeed the 2-year long proceeding that led to that decision – transformed my career and significantly influenced my views on the benefits of facilities based telecom competition.

Over the past 20 years, the federal government has continued to endorse market forces over regulation. In December 2006, a policy direction was sent to the CRTC by Cabinet, requiring

(a) the Commission should

1. rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and
2. 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;

Further, the 2006 Policy Direction states

(b) the Commission, when relying on regulation, should use measures that satisfy the following criteria, namely, those that

1. specify the telecommunications policy objective that is advanced by those measures and demonstrate their compliance with this Order,
2. if they are of an economic nature, neither deter economically efficient competitive entry into the market nor promote economically inefficient entry,
3. if they are not of an economic nature, to the greatest extent possible, are implemented in a symmetrical and competitively neutral manner, and
4. if they relate to network interconnection arrangements or regimes for access to networks, buildings, in-building wiring or support structures, ensure the technological and competitive neutrality of those arrangements or regimes, to the greatest extent possible, to enable competition from new technologies and not to artificially favour either Canadian carriers or resellers

To this day, there is a section that discusses compliance with the Policy Direction in each decision by the CRTC that relies on regulation. For example, See paragraphs 397-401 in the Wireless Code issued just 10 weeks ago.

Now, these rules apply to the CRTC, not Industry Canada, but would it be unreasonable to expect the department to observe the same policy direction?

Do we support the principles of ensuring government regulations “neither deter economically efficient competitive entry into the market nor promote economically inefficient entry”?

Can we confirm that measures promote “innovation and investment in and construction of competing telecommunications network facilities”?