{"id":7210,"date":"2014-05-06T01:00:57","date_gmt":"2014-05-06T05:00:57","guid":{"rendered":"http:\/\/mhgoldberg.com\/blog\/?p=7210"},"modified":"2015-05-05T21:15:34","modified_gmt":"2015-05-06T01:15:34","slug":"how-ottawa-is-harming-consumers","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=7210","title":{"rendered":"How Ottawa is harming consumers"},"content":{"rendered":"

Ottawa is harming consumers of telecommunications services by encouraging artificial competition. That is the key finding of a research paper<\/a> [pdf, 6.7MB] being released today by the Montreal Economic Institute<\/a> that looks at “The State of Competition in Canada\u2019s Telecommunications Industry”. <\/p>\n

The last paragraph of the Executive Summary captures the essence of the paper:<\/p>\n

The federal government has lost sight of the ultimate goal of promoting the development of a dynamic, efficient industry. It should set up fair rules for all that would allow fourth players to emerge if the market could support them. This would have the effect of actually encouraging sustainable competition in Canada\u2019s telecommunications industry and consolidating the dynamism of this industry, to the great benefit of consumers across the country.<\/p><\/blockquote>\n

“Contrary to popular belief, with three national wireless players, and several regional ones, Canada is far from being an aberration among developed countries,” says Martin Masse, a former political advisor to\u00a0Industry Minister Maxime Bernier, who co-authored the study with Paul Beaudry, who was a senior policy advisor to\u00a0Minister Bernier. The authors say Europe\u2019s wireless sector shows that high levels of government regulation and competition may bring down prices, but the European model discourages investment and innovation.<\/p>\n

“The State of Competition in Canada\u2019s Telecommunications Industry \u2013 2014<\/a>” is a 60-page report that provides data to counter a perception of “dismal performance” in the Canadian telecommunications sector. The authors explore the federal government\u2019s attempts to fostering the emergence of a fourth wireless player and the results achieved in the wireline sector through mandatory network sharing policies. The authors conclude with proposals to further liberalize Canada\u2019s foreign investment regime in the telecommunications sector (including broadcasting) and recommend relaxing restrictions in\u00a0its new spectrum licence transfer rules.<\/p>\n

Cultural nationalists are often quick to point out that eliminating foreign ownership restrictions in the broadcasting sector would lead to the elimination of Canadian content requirements. Such fears are unjustified. There is no reason why Canadian content requirements could not survive in a liberalized broadcasting market. Foreign-owned firms operate in many other sectors of Canada\u2019s economy and must abide by the same laws and regulations as Canadian-owned firms. There is no evidence that foreign-owned firms are less likely to comply with Canadian laws and regulations than Canadian-owned firms.<\/p><\/blockquote>\n

The Montreal Economic Institute paper asks “how does one analyze competition in an industry like telecommunications?” This is precisely the question being explored in a special breakout session at The 2014 Canadian Telecom Summit<\/a>, being presented in cooperation with the DeGroote School of Business at McMaster University on the morning of June 16. The session, “Competition in Canadian Telecom<\/a>”\u00a0will be moderated by Dvai Ghose of Canaccord Genuity and will feature:<\/p>\n