No Competition for You

The media and blogs are rife with articles about and condemning the CRTC decision to block GlobeAlive/WIND from winning a wireless telecommunications license. As Michael Geist correctly points out, the blame does not lie with the CRTC. This will require political action to amend the law or, as an interim measure, find some way around it in the near term. I have more faith in the present government acting than I do in the Liberals, when I consider their respective past behaviours with respect to protecting "Canadian-ness" versus open markets.

The incumbent operators are of course pleased with this development -- as well they should be -- as witnessed in this Telus press release and the quote from Rogers in this article. However, I wonder if they will pursue this aggressively when this decision is appealed. It's one thing to gloat but another to directly lobby cabinet. They do not want to be seen to be publicly against competition.

Which brings us back to telecommunications law in this country and the role of the CRTC. Those with a long memory will recall that the Canadian Radio-television and Telecommunications Commission was named the Canadian Radio and Television Commission; same abbreviation (CRTC), but with a expanded mandate. It is no surprise that telecommunications law and regulation mirrors the zealous protection of Canadian content that existed for the media. Ownership matters since that tends to reflect content, business locations, domestic employment and ability of the government to control these companies.

Back when the media and telecommunications sectors were more strongly dominated by a small number, or only one, company -- whether nationally or by region -- there was some legitimate argument for the domestic ownership requirements. Perhaps even more than that, telephone service -- which at one time was almost the entire telecommunications industry -- is rightly held to be an essential public utility. Pre-competition, there was in effect a social contract between the industry and the various governments whereby the industry had to meet a long list of service objectives in return for a virtually guaranteed profit stream.

With competition in place, there is no longer a requirement to protect the incumbents. If one provider fails or unilaterally decides to withdraw from the market, either partially or entirely, the presence of other players helps to ensure continuity of service. Today we have one foot planted in the past and one in the present. We need to make the final step and strongly promote competition so that there is a diminished need for domestic ownership and control over telecommunications providers. As it stands right now, the CRTC's legally correct decision makes no sense when the government's policy is to promoted facilities-based competition. Wireless is the best way to achieve this, and that is what GlobeAlive/WIND will do.

The government will need to act. I predict that they will, and that their decision will be favourable to the GlobeAlive.