Review of competition policies likely to affect telecom and broadcasting

When the federal government announced last November that it was considering a broad review of the country's competition policies, it was a sign the Conservatives were serious about making change and the March 19 budget appears to have clarified the situation even more. The government wants a modern and flexible competition framework that "drives firms to become more efficient, invest in new technologies, and introduce new products and services that benefit consumers." To accomplish this goal, Industry Minister Maxime Bernier will soon task an expert independent panel to review Canada's competition policies and report back to the minister before the 2008 budget on potential future legislative amendments. This appears to be similar to the comprehensive review of the telecom sector by the Telecommunications Policy Review Panel in 2005. The wise persons panel undertook a massive of re-evaluation of the country's telecommunications regulatory framework, broadband and ICT adoption. It recommended a number of ways the government could improve its telecom regulatory practices. Some might suggest that a review of the Competition Act is in order given the federal government's free market forces mantra. Others argue, however, a review of the Act itself, while probably a good thing, is only one aspect of a broader reassessment of competition policies. Lawson Hunter, executive VP and chief corporate officer at BCE Inc., tells Network Letter that there could be two sides to the review: the Act itself and small "c" competition policies. With respect to the Act, its tests and processes are areas that could be reviewed. Panel members are likely to raise the "efficiency" concept, which allows for a merger of two companies if the benefits or efficiency gains of the merger outweigh the anti-competitive impact of the merger. The concept comes into play when discussing the international competitiveness of companies and could be of critical importance if rules regarding foreign ownership are scrapped. Key to addressing this will be to have balanced policies that allow for a large international competitor to thrive while also recognizing there are domestic companies with no apparent requirement to compete internationally. But Hunter says the small "c" side is where the more fertile ground could be. But this is also where competition policies could be beyond the purview of the Department of Industry. Bernier has already indicated that the review will look at the country's foreign ownership restrictions in the telecommunications, but it likely won't stop there, meaning a review of the Investment Canada Act could be in the offing. Other government policies to come under review could include inter-provincial trade barriers, professional accreditation and labour mobility. While these latter issues have little to do with the communications sector, it demonstrates that the expansive reach the review could take. For example, if the review is going to discuss foreign investment in telecommunications, then it will likely have to take a look at Canadian cultural policies such as Canadian content requirements and foreign ownership rules in broadcasting. Some observers muse that this initiative could be much larger than a review of the country's competition policies. They suggest that perhaps the government is planning to look into the issue of competitiveness, which would entail a much broader discussion on the entire productivity and competitiveness agenda in Canada. The next step for the government, however, is to develop the terms of reference for the initiative as well as determining who's going to sit on the panel conducting the review. "The terms of reference are key," Hunter says. "You've really got to nail down exactly what it is you want done here." The BCE executive also notes that the panel members themselves are critical to the entire process. " going to have to think about the balance of who would be appointed, the types of expertise they want and the level of the people they want because the more senior the people you have on , the more seriously it will likely be taken," Hunter explains.

Review of competition policies likely to affect telecom and broadcasting

News | April 5, 2007

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