Others have hope in other proposals
OTTAWA – Independent ISP VMedia and others are expressing concerns about how the language used in a report recommending changes to the country’s communications laws may affect a new government directive that requires the CRTC to view its telecom decisions with a renewed focus on competition and consumer interests.
While big and small telecoms have been trying to complete study of last week’s 235-page report (meaning more than a few have not yet wanted to comment on it and all the big carriers have told us in various ways they’re still digesting it), which includes 97 recommendations to amend the telecom and broadcasting laws, some other smaller providers are zeroing in on one recommendation that puts a renewed focus back on “market forces” for competition.
“If the report’s recommendations on competition in the telecom industry, one which extracts $50 billion a year from Canadians, are adopted,” VMedia said in a press release, “the burdens borne by Canadians of exorbitant internet and mobile prices will be perpetuated in a framework where the predominant criteria will be market forces.”
The report’s 28th recommendation states the policy objectives in the Telecommunications Act should include fostering “a competitive market for the provision of electronic communications services primarily through reliance on market forces and, where required, through efficient and effective regulation.”
“The framing of competition as primarily subservient to market forces enshrines as legislation one of the worst elements of a Policy Direction issued in 2006, by (then-Conservative Industry Minister) Maxime Bernier, which has for over a decade hampered the CRTC in its deliberations over access to facilities and fair prices in tariffs paid for it,” VMedia continued.
A new policy directive to the CRTC, ordered last year by Innovation Minister Navdeep Bains, however requires the regulator to now consider competition by any means, not just through market forces, and put to consumer interests and innovation first.
The new directive came amid a debate about whether mobile virtual network operators should be allowed, on a mandatory basis, to access incumbent facilities. The federal government had by then already sent back a decision by the CRTC that rejected mandatory MVNO access, amid concerns that competition was lagging and as reports surfaced that Canadians pay among the highest telecom prices in the world.
The MVNO debate will of course reopen later this month when the CRTC holds its hearing on the review of its wireless market policies later this month.
“It’s a major step backwards,” VMedia co-founder George Burger added in an interview with Cartt.ca. He noted the panel’s recommendation, if adopted, would override Bains’ policy directive because the recommendation would be enshrined in the Telecommunications Act, which is law as opposed to just policy.
“The fact is that, yes there were recommendations in the report that were helpful, but if you have this as an umbrella over everything else, it really means that first, the CRTC is going to be much more circumspect in what kind of decisions it makes in connection with competition,” Burger said. “It also means that whatever decisions the CRTC does make, it will most likely be much more susceptible to court challenges because you can just see that people will endlessly be fighting over whether or not market forces were or were not sufficient to justify a certain decision.”
Burger added enshrining the concept in the law would also create a burden of proof on those who want to argue that there is insufficient competition in the market.
While Matt Stein, CEO of the Canadian Network Operators Consortium, agreed that there is some concern about how recommendation 28 could be read, he said “we also feel that there are many other recommendations that, if adopted, will advance telecom legislation in Canada, and benefit Canadians through increased competition.”
“That would basically flip the entire wireless review on its head.” – Jean-François Dumoulin, Iristel
The panel recommends the government direct the CRTC to “monitor and assess closely the state of competition in key electronic communications markets, including the market shares of non-Canadian participants, to ensure that rates are just and reasonable, and take remedial action if required.”
As to the specific use of “market forces,” the panel recognizes a concentration of power by the bigger players and notes that, “where markets are not sufficiently competitive or are inherently prone to market forces that perpetuate concentrated market structures, regulation is sometimes imposed to achieve the same objectives that would be achieved in a competitive marketplace.”
Andy Kaplan-Myrth, a lawyer at TekSavvy, noted on Twitter that while market forces is a prominent part of the panel’s recommendation, in the absence of competition, “effective and efficient regulation” is required, which he said is a positive view.
As for Iristel, it calls out recommendation #30 as potentially beneficial. It says, in part, the CRTC must, “as a condition of forbearance from retail rate regulation, either mandate supply of related wholesale inputs or explain why it is unnecessary or inappropriate to do so,” reads the report.
“That would basically flip the entire wireless review on its head,” said company VP of regulatory and government affairs Jean-François Dumoulin. “Right now, the onus is on the competitive industry to demonstrate that mandated MVNO access is in the public interest. If this recommendation is accepted, it would be up to the CRTC to demonstrate that it is in the public interest not to mandate MVNO access. This would enshrine wholesale access into legislation so that it is seen as the norm rather than exceptional measures.”
We’ll have more on the BTLR report (which many are now calling the “Yale Report” for its chair Janet Yale) in the coming days.
Original artwork by Paul Lachine, Chatham, Ont.
