Access to infrastructure outranks ownership limits in telecom, Kedar states

Gaining access to existing infrastructure is of greater value to new entrants than changing foreign ownership restrictions, according to one of this country’s telecom pioneers. In a webcast late last month, Mike Kedar also called on the federal government to restructure the Can-adian telecom regulatory regime. The founder of Call-Net Telecommunications Ltd. held a half-hour dissertation on the state of the Canadian telecom industry Jan. 25 through a webcast distributed by Dolphin Investor. He stressed the need for linking into current networks. "Access is the key to implementation of any service that is provided to the public, either through the SOHO, residential or business side," he said. "You may have your own private network, in which one of the carriers will build it for you, or you may access the public network in order to obtain certain services." Companies would be better served if they concentrated on achieving efficiencies within their operations, rather than rolling out more infrastructure, he added. He cited the examples of several failed CLECs that collapsed despite good business plans and good products. They did not recognize the overwhelming power possessed by the incumbents who control the networks. While many competitors are urging the government to loosen or even abolish foreign ownership limits, Kedar doubts new rules will be the panacea its supporters claim. "On the infrastructure side, I don’t think that foreign ownership is a huge problem right now. And it may be a red herring," he stated.He is not ready to jump on the bandwagon of broadband access as recommended by the National Broadband Task Force. Although a supporter of greater access, Kedar does not agree with the solutions presented by fans of the task force. "I think that taking a huge budget of a few billion dollars to promote or introduce subsidized deployment of broadband in the less populated areas is probably not the right approach," he asserted. "If we would address this from the core, which is the access in the major markets, then companies would be able to go out into the boondocks and the small places and create through wireless or through other means, point-to-point services that could be subsidized through ability to compete in the major markets by having better access." Kedar believes the federal government should busy itself with restructuring the regulatory regime in this country. Expanding upon remarks he made following the appointment of Charles Dalfen as CRTC chair (NL, Jan. 14/02), he called for the reduction in the number of agencies that oversee telecommunications. "We have on the one hand the CRTC, which is an arm’s-length regulator of the government; we then have the Bureau of Competition, whose job is to maintain fairness in the marketplace. Then the third one is Industry Canada, which controls licensing of certain media such as wireless. In the U.S. we have the FCC and the Justice Department, which shares a more sustainable structure." The Toronto entrepreneur later conceded that the American situation is hampered by having state regulators assume control of some local operations. Provincial regulation of telecom in Canada finally ended when SaskTel came under the jurisdiction of the CRTC (NL, May 23/00). Kedar worked with new commission chair Charles Dalfen back in the 1980s. He expects his former colleague will have serious issues to deal with. "I’m not saying that all the competitive sides are always correct. The ILECs and the cable companies have a lot of issues that need fair regulatory supervision. So Charles has a big job ahead of him and he can be assured that he has the support of me and others to make a difference." For more on Kedar’s remarks, see the Newsmakers column in this issue.

Access to infrastructure outranks ownership limits in telecom, Kedar states

News | February 11, 2002

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