Over the holidays, the impact of political influences on telecom markets came to the forefront. Telecom Policy published a paper, Perspectives on political influences on changes in telecommunications and internet economy markets.

In addition, in early November, there was an appeal filed with Cabinet [pdf, 221KB] by an interesting coalition of interests: Eastlink, CNOC, Cogeco and SaskTel. What I found most intriguing wasn’t the eclectic mix of interests represented by the petitioners. Rather, it was that the petition was submitted as “a precautionary filing in the event that the [CRTC]  does not vary Telecom Regulatory Policy 2024-180”. From a purely procedural standpoint, I don’t really understand why the coalition didn’t wait for the outcome of the CRTC ruling on the petitioners’ Review and Vary applications.

The petition was filed under Section 12(1) of the Telecom Act:

12 (1) Within one year after a decision by the Commission, the Governor in Council may, on petition in writing presented to the Governor in Council within ninety days after the decision, or on the Governor in Council’s own motion, by order, vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.

The plain language of Section 12(1) uses the phrases “after a decision” and “after the decision”. I don’t see a provision in the Telecom Act for a Minority Report type of pre-cog filing with Cabinet in anticipation of a CRTC decision going the wrong way. Procedurally, the petitioners seem to be asking for political intervention in the form of a Cabinet review of a decision that has yet to been made.

The submissions in response to the petition were due on Monday (January 13). I’ll consider more on this file in a future post.

The Telecom Policy paper resonated with me. The paper’s abstract opens with “For the past thirty years, international consensus has supported telecommunications policies favoring the pursuit of economic efficiency and the distancing of governments from ownership and day-to-day industry governance.”

I think back to my own experience in the telecom industry. I moved to the US 41 years ago, in January of 1984, just a month after the break-up of AT&T and the old Bell System. At the time, Bell Canada and Northern Telecom won a contract to help General Motors leverage the newly competitive US telecom marketplace. I returned to Canada five and a half years later to work on convincing the CRTC to open up competition in Canadian telecom. Long distance competition was approved in 1992 and other sectors opened up in 1994. The UK and Australian telecom markets were opening up as well. So, the 30 year timeline set out in the paper fits. An interesting side note: in Canada, our team from the private sector had to make the case that competition was good. The regulator needed to be convinced.

The intensity of political influences on the telecom market has varied greatly over the past 3 decades. Like a pendulum, it swings between extremes, apparently unable to reach a consistent equilibrium. This is not just a Canadian phenomenon.

As I highlighted last week, Prime Minister Starmer, the business secretary, and the Chancellor reportedly wrote regulators, seeking a lighter touch in order to help stimulate the economy. “Sky News has learnt that the prime minister wrote to more than ten regulators – including Ofgem, Ofwat, the Financial Conduct Authority and the Competition and Markets Authority – on Christmas Eve to demand they submit a range of pro-growth initiatives to Downing Street by the middle of January.” Ofcom – the UK parallel of Canada’s CRTC – was also reported to have received the letter, which was “unambiguous in its direction to regulators to prioritise growth and investment.”

The message was clear. The Prime Minister wants regulators to consider growth instead of just risk, “ensuring that regulation does not unnecessarily hold back investment and good jobs in the UK.” Regulators were asked to identify barriers to economic growth that could be removed by the government. Regulators were to report on which “regulatory objectives were either conflicting or confused.”

The Telecom Policy paper confirms “both the persistence of regulation and its ability to expand into all areas of the digital economy, and a disconnection of regulation from the original intentions to promote more competitive markets.”

When policies are formed and decided at the ballot box by comparatively poorly-informed voters and politicians, rather than better-informed regulators and policy experts, a risk exists that inappropriate laws, rules and policies will prevail, and the desired outcome (of economic efficiency in the sector) will be made harder to obtain.

A recent trend towards populist policies in national and local elections appears, in some countries, to be expanding from telecommunications to the information economy sector.

The paper also notes that political influences are now moving beyond economic matters, as governments seek to become actively involved in the moderation of internet content. Canada’s controversial Online Harms Act was another legislative victim of last week’s prorogation of Parliament.

Recall, last summer I wrote about online platform accountability. That piece looked at a paper proposing an alternative to direct government regulation of content.

The Telecom Policy researchers found that political initiatives are rarely supported by reasoned economic, legal or social analysis of their likely benefits and detriments. Resorting to political interventions (rather than using a regulatory consultative process) was possibly because the desired outcome may not be supported by an independent analysis conducted by the relevant regulatory agencies.

Last week, the International Center for Law and Economics filed a submission with Canada’s Competition Bureau in response to the Bureau’s consultation reviewing the merger enforcement guidelines. The ICLE paper echoes precisely this concern. “The Bills introduced changes to Canadian competition law that are, in our view, severely misguided. The most problematic of these changes are encoding structural presumptions in the Competition Act and jettisoning the efficiency exemption in merger review. In our view, these changes signal a worrying turn away from sound economic analysis and toward formalistic line-drawing based on market structure.”

I can think of a number of addenda to Canada’s Telecom Act over the past few years supporting such a thesis. Refer to my post last month for an example of one such “political initiative.”

Be sure to check out the Telecom Policy paper.

We will want to monitor progress on Prime Minister Starmer’s “regulating for growth” initiative. Will any of the Canadian political parties adopt such an approach in their 2025 election campaign platforms?

Shortly before New Year’s, UK Prime Minister Keir Starmer reportedly wrote key regulators telling them he expects them to be regulating for growth, to ensure regulations are not holding back investment and jobs.

Sir Keir’s letter is understood to have referred to a need for every government department and regulator to support growth, and called on each recipient to submit five ideas for delivering that mandate by 16 January.

The letter also urged regulators to identify how the government could remove barriers to economic growth and where regulatory objectives were either conflicting or confused.

Keep in mind that a month ago, the UK’s Competition and Markets Authority (CMA) approved the merger of Vodafone with Three, reducing the number of mobile carriers from 4 to 3. The CMA stated “the Merger is likely to boost competition in the long term in both markets and result in significant increases in mobile network quality in the UK.” Economic growth and investment were clearly important considerations for the Authority.

Canada might want to consider how our own government agencies could remove barriers to economic growth and where regulatory objectives are conflicting or confused. In June of 2023, I wrote how Canada’s climate for investment looked cloudy. A survey of CEOs found nearly 40% identified poor policy and regulation as the biggest threat to conducting business. It was the number one threat identified, by a nine point margin.

In its year-end review, the Globe and Mail noted that 2024 was “a very bad year” for the telecom industry. That isn’t good for investors. And it isn’t good for consumers either.

Telecommunications is a business requiring massive levels of ongoing investment. I have frequently written about the need for policy and regulation to create the appropriate climate for businesses to deploy capital. More than 600 of my blog posts show up in a search for “investment”. Operating in a business environment so sensitive to regulatory decisions, a clear message of “regulating for growth” would be an improvement over the ambiguities contained in the current Policy Direction.

I noticed a media release from the CRTC last month describing its plan to improve the Broadband Fund “to help connect Canadians faster.” The Broadband Fund isn’t government money. The source of cash for the fund comes from the communications industry. Contrast this with other broadband stimulus programs from various levels of government, where funding is sourced from the overall treasury. Has the regulator considered the impact of its Broadband Fund on investment in the sector? A little over 4 years ago, I asked if the CRTC’s fund is fundamentally flawed. Keep in mind that there are other federal funding programs for rural broadband, and other federal agencies responsible for indigenous communities. Does Canada really need the CRTC to be duplicating their efforts? Would it be more effective for the CRTC to refocus the Broadband Fund to address ongoing expense shortfalls in high cost serving areas, rather than duplicate the awarding of project-based capital funding?

When the current Policy Direction was released for comments, I wrote about the importance of policy consistency to promote growth and investment. There is an important balance to be made between the need to promote investment in networks, and the need to promote competition and affordability.

Canada will soon be heading to the polls to elect a new government. I would endorse a platform promoting regulating for growth, to ensure regulations don’t hold back investment and jobs.

Do you need holiday reading material to keep busy over the next couple weeks? Things to help you stay out of the way? Excuses to keep out of sight so you don’t get assigned any chores?

Of course, you should catch up on your reading on this blog. Last week, I published my Top 5 list, providing the posts most read over the past year. Those would make a good start.

My year-end wrap up posts are also good holiday reading material: “Checking my scorecard” and “So the years spin by…”.

Howard Law has an interesting blog looking at Media Policy. He recently featured discussions about how to move forward with CBC. Most recently he interviewed former CRTC Vice Chair Peter Menzies. Earlier we heard from former CBC Executive (and former Deputy Minister of Communications) Richard Stursberg.

Also, be sure to check out Ted Woodhead’s latest: “Telus really wants to be a reseller now? In Regulatory Calvinball that makes complete sense.”

If you haven’t read those materials yet, do so before you come back to the office in January. Both sites have places to sign-up. You should.

30 years ago, I was the executive responsible for a national voice telecom network. I used to make a point of going into the office on Christmas Eve, Christmas Day, and New Years, to chat with the people who had to be away from their families on such a special and meaningful night.

I remember the building facilities person – let’s call her Irene (since that was her name) – being very concerned about the evening crew repurposing the cable TV feed we had for the Weather Channel. Irene was worried the staff might start watching late night movies on the big board in the Network Operations Centre. My view was that if it helped the night shift stay awake, it was money well spent.

Many of us are taking time away from the office over the next couple weeks. Remember that there are dedicated professionals keeping an eye on the technology that so many of us are able to take for granted. They keep the lines open through inclement weather, power failures and pull teams together to rapidly respond to outages, often working round the clock in horrible weather conditions.

Whatever holiday or holy days you celebrate over the coming weeks, raise a glass and salute the professionals keeping it all running. Keep safe. See you in the New Year

Which of my blog posts were the Top 5 in 2024, the posts attracting the most attention?

Looking at the analytics, these 5 articles had the most individual page views:

1. “Affordable broadband isn’t just a rural issue” [May 19, 2015]
2. “Respectfully disagree” [December 12, 2011]
3. “An especially relevant dissent” [July 11, 2024]
4. “Defending my identity” [March 7, 2024]
5. “Understanding EBITDA” [July 5, 2023]

Honourable mentions go to:

• “ARPU doesn’t reflect consumer bills” [May 16, 2024]
• “Digging ditches and digital policy” [June 19, 2013]
• “Rural broadband isn’t easy” [May 14, 2015]

I found it fascinating to see that only 2 of the top 5 posts were written this year. The archives continue to provide interest to so many readers.

Which of my blog posts resonated the most with you? I just posted my year-end wrap-up yesterday, so it hasn’t had a chance to crack the Top 5… yet!

Thank you for following me here on this blog and on Twitter [X}, and thank you for engaging online and by phone over the past year.

Click here to subscribe to my weekly email newsletter, with its digest of the previous week’s blog posts.

I hope the coming holiday period provides an opportunity to connect (in person) with your family and friends. I will be back in the New Year. In the meantime, let me repeat my very best wishes for health, happiness and peace in the year ahead.

Somedays, more than others, I really do feel the years spin by.

As I wrote last year, I am continuing to use lyrics from Joni Mitchell’s Circle Game as the title of my year-end wrap-up.

So the years spin by and now the boy is 20
Though his dreams have lost some grandeur coming true
There’ll be new dreams, maybe better dreams and plenty
Before the last revolving year is through

No question. The years seem to be spinning by ever so quickly, but I’m not ready for that “last revolving year”… yet. There is so much still that needs to get done. So much that I wrote about last year remains just as valid today.

Improved access to quality information is the presumptive raison d’être for Canada’s Online News Act, Bill C-18. While I understand the motivation behind the legislation, as I have written, its implementation was badly fumbled.

Unfortunately, I am concerned that this is another case of government focus on the supply side without consideration of factors impacting demand. With all the best funding in the world to create better news, are we doing enough work to ensure there is a market to consume that news? Just as I have frequently complained about our work on broadband, we seem to be better at stimulating supply, and rely upon a Field of Dreams hope for the demand side. What if you build it and they don’t come? There are a number of ways to improve funding for news, but how does that help deliver quality information to a generation who don’t watch linear TV, and don’t pick up a newspaper, or rely upon news websites?

What do we do if we provide funding to create high quality local and national newsrooms, but a generation of consumers rely on 30-second high-energy video clips where adherence to facts isn’t valued as highly as the entertainment quality by the search algorithms?

Will digital literacy training in elementary and secondary schools include teaching how to differentiate between information, misinformation, and disinformation? How can we create more sophisticated consumers of high quality content?

Dealing with supply side issues is relatively easy. In most cases, if you throw enough money at the problem, it gets solved. Whether it is building broadband, funding newsrooms, creating quality Canadian media content, supply can be stimulated with injections of cash. Dealing with the demand side is much more challenging. What do we do when Canada’s universal broadband objectives are met, but more than a million people remain off-line? The issue of driving increased adoption will need to be a carry-over from my 2023 agenda into next year.

Last week’s “Checking my scorecard” provided more reasons for why I think it is too early to consider hanging up the ol’ keyboard.

Looking at what I set out as my 2024 agenda, I see that we made progress on some items, but others, such as the issue of driving increased adoption, will need to be carried over once again. I continue to shake my head, in both amazement and dismay at academics who think the best solution to all broadband afflictions, both adoption and rural access, is building municipal or government-owned fibre.

I added 72 blog posts to “Telecom Trends” over the course of 2024, continuing to write 1 or 2 posts per week. There are now more than 3325 posts in the archives (fully searchable). I continue to send out my weekly newsletter; you can subscribe here.

As I have said in the past, it is my objective for this blog to be a source of quality information on Canadian telecom policy, with occasional gastronomical diversions. The past year has seen me add content dealing with the rising levels of antisemitism and online hate in this country. This content rightfully belong on a blog looking at Telecom Trends because of the tie-in to proposed Online Harms Legislation.

I look forward to engaging with you in the New Year, as the years spin by toward another spring and summer.

I wish you and your families a happy, healthy, safe and peaceful holiday season.