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By brians, November 1, 2009 2:20 pm

Last Thursday the CRTC came out with a decision on the whether the ownership structure of Globalive, who are in the process of building Wind Mobile, fill the requirement on Canadian foreign ownership restrictions. They aren’t doing themselves any favours.

I wrote earlier about how I thought that the CRTC was hampered in their decision by the Canwest – Alliance Atlantis merger decision from a couple years ago. The CRTC decided in this case that foreign money from Goldman Sachs as the debt and equity holder and controlling owner was preferable than having Egyptian owners, in the form of Orescom. (I’ve heard from CRTC people that national security is part of their decision process – so one wonders whether there was a bit of that here.)

Whether the CRTC was wrong or right in this decision, the CRTC hasn’t been coming off these days as the fearless supporter of the powerless Canadian citizen. Their recent decisions have generally been ones favoured by the lobbyists of the big telecom companies in Canada. A few weeks ago they decided, for the most part, to support the major carriers in a decision which put the burden of responsibility on the consumer to prove the carriers wrong in issues of network neutrality (and we how much know your average consumer knows about internet packet throttling). This week they supported the powerful lobbies of the carriers in the Globalive decision.

By an extension of their own logic, if the CRTC is not supporting and protecting consumers in providing them choice (or assuming that there is enough choice in the market for our consumers) then they have already come to the conclusion (aided by lobbyists) that the Canadian market for telecommunications services is highly competitive – that innovation and new product is high, barriers to entry are low, and prices are dropping and competitive. We, of course, know this isn’t true.

There is an undercurrent going on the techno-telecom crowd in Canada supporting a movement to disolve the CRTC. They better watch out, because it is getting very hard for average Canadians (not the super digerati or highly informed telecom geeks, but those that keep an eye on telecom) to understand the role of the Commission. To those watching from the sidelines, it looks like the CRTC is simply an extra arm of the major carriers to keep the barriers to entry high, competition low, and their cabal tight.

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By brians, August 20, 2009 1:37 pm

There’s a lot of discussion on the internets this morning about an article Peter Nowak from the CBC has written about a petition and facebook group requesting the dissolving of the CRTC. Twitter users have taken a liking to this from a quick CRTC of the stream and the petition is gaining some steam, or seems like it is. Discussion on the CBC page is extensive and intense with over 220 comments since last night’s posting of the article.

Michael Hennessy has responded on his blog WhenDogsRunFree, with an unusual defense of the CRTC, although I love his admission in the head for his blog, that while he loves free market, he makes his income on regulation itself “I now work in an anti-regulatory occupation although without regulation I would be unemployed.Kinda ying yangish”

The interesting thing about this discussion is the fact that we can have it – and it is worth having. Questions like “Why does the CRTC exist?” are real questions worth answering. On the telecom side (we’ll leave it at that for now) we can ask such things as: Is it there to protect us from natural monopolies? To decide where towers should go? or where wires should be strung? how much we, as consumers, should pay for various services? how much companies should pay to each other? or, more broadly, to promote cheap and plentiful communication among Canadians.

The carriers all spend much of their regulatory money on folks like Michael, to promote the notion that the market is highly competitive. And in a competitive market, one assumes we don’t need a regulator. But on the flip side, that regulator ensure that the competition stays minimal. Regulators create nice barriers to entry for new market entrants. Keeping a tight rein on new telecom licencees, issuing tiny pieces of spectrum (yes, that’s Industry Canada, but it’s the same issue), and making sure new phone numbers don’t get too freely given to folks like Skype such that they might tread heavily into the carriers markets. This, for carriers, is highly important to protect.

Rather than get into the nitty gritty of whether the CRTC made a bad decision on wholesale tariffs for TekSavvy, we might stand back and ask broader questions like: What are we protecting? Culture, communications, or profits for an industry. That that’s a bad thing to protect – Bell and Telus employ many Canadians.

We can also ask the question. If we started a dissolving of the CRTC, what would happen? Would new entrants come? or would we revert to natural monopolies? would Global companies offer service at more competitive rates? what would be the downside?

All good questions to engage a discussion.