Looking at telecom competition one decade later

At the recent Celebrating 10 Years of Telecom Competition conference in Toronto, George Addy, a partner at Osler, Hoskin & Harcourt LLP and formerly with Telus and the Competition Bureau, delivered the closing address. An edited version of his remarks appears here. In preparing my remarks, I began to reflect, as most of us do on the occasion of a 10 year anniversary or multiple thereof, on what was achieved, what opportunities were missed, what could have been done a lot better and then casting my eyes forward on the challenges that face us for the next decade. I look at the high level of competition in long distance and wireless service and feel that we have accomplished quite a bit for the consumer (and for the benefits of higher education given the skills required to do any meaningful comparative analysis of difference cellular billing plans!). On the negative side, most would agree that we have fallen short of expectations on local residential service competition.Most of you probably have a better understanding of the root causes for some of the failures over the past decade and many will take pride in participating in some of the successes. One feature I am personally proud of is the competitive rivalry which exists today between Telus and Bell – a marked difference from the cosy relationship which existed within the Stentor alliance. It is evidence that sometimes you can do more from the inside than from the outside. First, I believe that it is time to think about re-designing the regulatory oversight institutions governing this sector. And, despite being a long-time advocate of competitive market disciplines and framework laws in general and the Competition Act in particular, I think the institutional mechanism should be a rejuvenated sector specific regulator. This conclusion is based on several indicators – two of which are:Many and probably the majority of Canadians fundamentally do not believe that competitive markets will deal with them fairly and they want the comfort of more direct and continuous oversight.The compliance costs associated with our current regime are staggering. My second comment is that government has to start making some tough choices. Matrix of social policy objectives across the sector: Foreign ownership limits (does anyone seriously think telecom service is a function of who owns the poles?) What is basic telecom service? What is universal service? How should we define it? Should we continue our "Enronesque" off-balance sheet funding schemes — such as deferral accounts and contribution charges? Many goals may ultimately be found to be in our national interest but some will conflict. And relative priorities must be established by those elected to make those choices rather than the CRTC. Don’t misunderstand me. I am not criticising the CRTC – they are trying valiantly to reconcile what may be irreconcilable, to fill the void left by political representatives reluctant to wade into "thorny issues". In hindsight, perhaps it would have been better if the CRTC had been less helpful and tossed some of these "hot potatoes" back to the politicians. Artificial distinctions are made between local and long distance markets, between wireline and wireless markets, and even between broadcasters and telecommunications carriers. Increasingly, these distinctions are technically and practically unfounded. We need to remember, often consumers don’t care about what technology brings them service – the technology is our problem, not theirs. They want the service. For example, in mobile voice or data – they don’t care about CDMA, TDMA, GSM, analogue or digital—what they want is mobility, clarity and competitive prices. Market participants themselves must be in a position to determine what services will be offered, what technology will be used to offer them, what prices will be charged, and so on. Service providers must be free to act on their own conceptions of market demand and their own abilities to capture economies of scope in the production, marketing and billing of services. The regulatory institutions and governing policies must be as non-intrusive as possible.

Looking at telecom competition one decade later

News | July 3, 2002

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