Nanny-state telecom regulation

On Tuesday, Conservative leadership hopeful Maxime Bernier said the CRTC only took the Policy Direction seriously for a few years before reverting back to its old ways. Yesterday, CRTC staff issued a letter that seems to prove him right.

Bernier said “Canadian consumers are best served when telecom providers are free to compete and invest, not when bureaucrats tell them what to do.”

On Wednesday, CRTC staff sent a letter to Iristel and NetTalk, admonishing the companies for holding Canadian consumers “hostage”.

NetTalk was buying wholesale telecom services from Iristel to offer deeply discounted home phone service. Iristel disconnected NetTalk customers after a prolonged commercial dispute.

Commission staff notes that Iristel informed netTALK in advance that it would cease providing telecommunications services and traffic to netTALK as a result of an ongoing dispute. Despite that information, it does not appear that netTALK immediately took measures to port its numbers to a new underlying carrier. Commission staff believes that netTALK could have minimized the chances of disconnection, and impacting tens of thousands of Canadians, if it had taken actions more quickly and followed the progress more closely.

The CRTC goes on to provide the two companies with “reminders”:

• Commission staff reminds both parties that any dispute, commercial or otherwise, is never a legitimate reason to not abide by any of the Commission’s regulatory requirements.
• Parties are reminded that the Commission provides services to help parties resolve disputes related to the Broadcasting Act or the Telecommunications Act.

As to the latter point, keep in mind that the CRTC has not shown any sense of urgency in resolving a customer impacting commercial dispute between Sugar Mobile and Rogers. That file (8620-J106-201601633) has been in front of the CRTC since mid February. So, it might be reasonable to ask if the CRTC can deal with resolution of commercial disputes in a timely manner.

As to the former point, it is unclear that any of the CRTC’s regulatory requirements were violated, so what exactly are the regulatory requirements of which the parties needed to be reminded? The CRTC’s letter was written and signed by staff, not Commissioners, although the CRTC’s Twitter stream gives the appearance that the letter carried the weight of an official CRTC order.

One might question what the recipients of the letter are expected (or required) to do.

At the end of the day, keep in mind NetTalk offers consumer services that cost about one-tenth the price charged by incumbent carriers, with basic plans starting at about $50 per year.

I bought a hammer last summer at a local dollar store. I paid a dollar for it. It worked just fine for putting up a picture hook into dry wall, but when I tried to drive a nail into my deck, the head of the hammer broke off the handle. I didn’t go running to a regulator because the dollar store product didn’t perform the same way a hardware store hammer works. At a certain point, consumers should take responsibility for their own choices. If you buy a phone service that only costs a couple bucks per month, that might be a clue that might not perform the same way as a service that costs 10 times as much.

Bernier said “As the industry evolves, the CRTC finds new reasons to continue to regulate it, in order to justify its existence. In doing so, it is not protecting consumers, it is only protecting its own power.” Yesterday’s letter from CRTC staff shows that he may be absolutely correct.