The House of Commons Standing Committee on Industry, Science and Technology (INDU) is meeting behind closed doors tomorrow afternoon to discuss a “Request to Undertake a Study of Telecommunications Policy“. The 4 members of the Committee who apparently requested the meeting may find support from expert reports sitting on the shelf of the Government library.
I have been writing this blog for about seven and a half years now, close to a quarter of my 33 years in the telecom sector, creating an archive of materials that highlight telecom policy and strategic issues over a reasonable period of time.
I find it interesting sometimes to take a fresh look at some of the more than 2,000 posts on this blog to see which issues are coming up again.
For example, two years ago, I wrote a piece “Time for another review,” highlighting the recommendation from the 2006 Report of the Telecom Policy Review Panel [pdf] to have a fresh look at policy issues every five years.
The Minister of Industry should be mandated by legislation to undertake a comprehensive review of telecommunications policy and regulation every five years.
It has been 7 years since the Telecom Policy Review Panel delivered its report in 2006.
How different would the wireless discussions have been this summer if the government had acted on this recommendation? Indeed, legislation mandating such a review would really not have been required; simply an act of digital policy leadership.
Earlier this morning, the Fraser Institute released a report, “Spectrum Auction Rules and Competition Policy: An Assessment” [download report, pdf], further contributing to the discussion about Canada’s digital policy.
The paper argues that while the issue of the competitiveness of the wireless sector in Canada is unsettled, initiatives to ensure that the large established carriers do not unduly restrict competition in the future can and should be addressed through the Competition Act, rather than by “handicapping” the competitive process, including spectrum auctions. As well, the likelihood of established carriers being able to restrict competition would be substantially diminished if all existing restrictions on foreign ownership in the sector were eliminated. In all other respects, efficient competition is more likely to be realized if asymmetric rules regarding the acquisition and use of assets, including spectrum licenses, are eliminated.
The Fraser Institute says that the number of competitors can be “an unreliable guide to the strength of competition in that market”; markets can be “workably competitive with as few as two or three competitors.”
The report goes on to say that recent evidence shows that Canada’s wireless carriers perform as well or better than their US counterparts. Since many observers argue that the US wireless sector is “workably competitive,” this finding suggests that Canada’s wireless market is as well.
The report says that its main conclusions are that handicapping incumbents can have adverse consequences for efficiency that will ultimately reduce the welfare of Canadian wireless consumers.
Four years ago, during the Globalive/Wind Mobile foreign ownership review at the CRTC, I wrote about what the Telecom Policy Review Panel has said about liberalization of the ownership restrictions.
In the recent past, our government has commissioned a number of expert reports, many of which end up on book shelves with too few of the recommendations adopted.
We now have our third Industry Minister since the Digital Economy Strategy consultation was launched, seeking input on 24 questions under 5 broad themes. As I wrote at the time, then Industry Minister Tony Clement said:
Canada can and should be a leader in the global digital economy. Nothing prevents us from being the best place in which to invest, grow a digital business or create digital content for the world.
Now is the time for the private sector to step up. To contribute its ideas. And then, when the digital strategy is in place, implement the game plan.
Yes, Canada can and should be a leader in the global digital economy. But we need to be asking some very hard questions about whether the current policy framework makes it “the best place in which to invest, grow a digital business or create digital content for the world.”
Thankfully, the private sector hasn’t waited for a digital strategy to be “in place” before launching such initiatives as affordable computers and broadband for low income households, without the government.
When the House INDU Committee meets, its members may want to consider that the study on Telecom Policy is already 2 years overdue according to Recommendation 9-4 of the Telecom Policy Review Panel. It may want to ask if the absence of such a review and the absence of having “a digital strategy in place” are inhibiting Canadian leadership in a digital economy.
Perhaps the government will agree to have a fresh look at its overall communications policy.
Is it time to commission a new panel to “undertake a comprehensive review of telecommunications policy and regulation” as was recommended 7 years ago?
Mark: Great call to action for the government! Hopefully they will act on it, and not take another 7 years to do something?
There is no incentive for the Conservatives to change anything. They stand to benefit in two ways.
1. They’ll earn extra votes as the party that fought on behalf of the pocketbooks of “ordinary Canadians”. By the time most 700 MHz towers go live and Canadians realize that Verizon isn’t the cut-throat, low-cost saviour they though it’d be, the 2015 election will be over and done with. The best part? The Conservatives will escape any culpability by decrying the “anti-competitive practices” of Bell, Rogers, and TELUS.
2. A rigged auction stands to generate more revenue for the government than a fair auction. Verizon will be able to snap up blocks C1 and C2 — which align with the majority of its U.S. 700 MHz licences — with little to no real opposition. If Bell, Rogers, and TELUS were each allowed to purchase more than one prime block, Verizon would have far less incentive to enter the Canadian marketplace. Verizon isn’t a foolish company, and it knows better than to invest heavily in a hostile foreign market that won’t provide it with outrageous favours and special considerations.
With the current rules, Bell, Rogers, and TELUS will be forced to enter extremely aggressive bids on the remaining two prime blocks. If the restrictions were lifted, Bell, Rogers, and TELUS could instead put their money to better use by enhancing the quality and reach of their already world-class LTE networks.
Telecom policy from the era before smart phones and massive data networks. It is like transportation policy before the car came out.