Foreign investment needed to proliferate high-speed Internet access across Canada

Little by little, the telecommunications industry has undergone changes that have opened it up to foreign investment. As Canadians begin to demand equitable and reasonable access to high-speed Internet connections, the need for foreign investment actually becomes a necessity. The Canadian government should once again consider easing restrictions to encourage foreign investment and proliferate high-speed Internet access across Canada to better serve Canadians. The National Broadband Task Force recently made recommendations for disseminating Internet access services. It estimated that about three quarters of Canadian communities, home to about a quarter of the Canadian population, do not have access to high-speed services. It strongly recommended that the government create an effective regulatory environment conducive to private innovation and investment. While on the surface it seems like Canadians have a broad choice of Internet service providers, in reality they don’t. Internet Service Providers are strictly limited in their choice of local telephone companies from which they provision circuits. This arrangement is like giving Canadians a handful of builders from which to buy their houses, but limiting the builders’ ability to purchase building supplies to just one manufacturer. Easing some of the regulations in telecommunications and creating a more moderate environment provides three significant benefits to Canadians. The first immediate advantage is the increased customer savings and options that result from competition. In a competitive environment, costs are driven down and customer options up. No matter what the industry or market, an open environment results in competitive pricing. The second benefit to a more moderate environment is that incumbent telecommunications companies are better equipped to compete globally. As globalization continues, incumbent telecommunications firms in Canada risk isolating themselves from a broader market. Their ability to form partnerships or make foreign acquisitions is severely limited if they do not compete in an open market in their home country. If Canadian telecommunications companies expect increased access to foreign markets, then open access to Canadian markets would seem appropriate. The third benefit to Canadians is the increase in innovation and new products available. Increased competition will promote more efficient and effective means of providing Internet service. To provision high-speed Internet access to serve both urban and rural areas across the country, a tremendous amount of investment is needed in infrastructure. More than a few companies are needed to build Canada’s Internet infrastructure. While Canadians could greatly benefit from a more moderate telecommunications environment, there seems to be a reluctance to ease restrictions based on fears of loss over our heritage and control over our telecommunications network. These reservations, however, are not present in other industries—not mining, or forestry, or food, etc., which are equally important to our cultural heritage and future prosperity. Competitive environments in these industries have not resulted in reduced control but improved commodity choices, as well as increased job opportunities. The promotion of Canadian content is important to maintaining our heritage, but need not be intertwined with the mechanisms for providing content. The mechanisms for providing content do not need to be strictly Canadian owned and operated. While easing the current restrictions will help deliver equitable Internet access to Canadians, maintaining a certain measure of control is also necessary for creating an impartial, competitive environment. The CRTC provides a valuable role for ensuring a level playing field, and regulating the same rules for all industry players. While Canadians are well connected when it comes to local telephone services, Canadians don’t have equitable access to high-speed Internet connections. To narrow the digital divide, the Canadian government should once again consider easing restrictions to encourage foreign investment and proliferate high-speed Internet access across Canada. Reforming the regulatory environment will help improve pricing for customers, increase Canadian telecommunications competitiveness inside and outside of Canada, and introduce improved customer product offerings – all of which are ultimately in the best interest of Canadians. Tal Bevan is president of WorldCom. Canada.

Foreign investment needed to proliferate high-speed Internet access across Canada

News | 08/13/2001 4:00 am EDT

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