Canada’s Telecom Industry Scores More Points for Deregulation

by Jordan Richardson on April 1, 2010

You can put another checkmark in the win column for Canada’s telecommunications industry, as they’ve managed to convince the CRTC to essentially look the other way on regulating mobile wireless data services. While it wasn’t successful in getting the Canadian Radio-Television and Telecommunications Commission to drop exploration of data regulation outright, the industry did get a stay of execution of sorts to hold off on any further discussion of the topic for the time being.

It’s a big deal for the telecommers to score this type of point on the CRTC and they’ve managed to scrape at least two points on the regulator as of late, leading to some atypical dissent from within the Commission itself.

The first point was scored when the CRTC elected to deregulate the way phone companies deal with requests to expand service areas. This means that small communities can no longer demand service through approaching the CRTC. Instead, the communities will have to approach the philanthropic phone companies and hope that they’ll get service.

Louise Poirier, a member of the CRTC, says that the deregulation leaves at least 35 municipalities to the mercy of the phone companies. The CRTC’s reasoning was that the intensifying competition in the industry, thanks to the loosened regulations on foreign ownership of course, will help the business sector police itself to offer the best service. We all know how that usually works, don’t we?

The second point, the aforesaid resolute and temporary ignorance of regulating mobile wireless data services, is essentially a rejoinder to industry pressure. The telecom giants would love it if the CRTC would drop the idea altogether, while the CRTC appears to sincerely want to look into it further but has conceded for the time being.

The CRTC has agreed, at least for now, to limit its investigation to merely ensuring that the providers can’t commit “undue discrimination” when it comes to offering services. The regulatory body will not take the supplementary step of ensuring that high speed wireless data service is a basic requirement that should be provided to customers by all providers.

The CRTC’s lax approach with respect to this issue comes as no surprise, as the Harper government all but ordered the CRTC to favour deregulation whenever possible. The idea is to hurl open the doors to the decency of competition, with the perceptible product being that, you guessed it, the industry will police and scrutinize itself to ensure the “best service” for us modest consumers.

With so much money being pooled in Canada’s telecom industry, even the most dormant talk of regulations gets the portly cats pacing crossly in their litter boxes. Any possible restrictions imposed by the CRTC or any other regulatory body are met with the utmost derision, as any possible restrictions could get in the way of inexhaustible profits.

In the end, this comes down to the classic clash between regulatory bodies and the corporate agenda. Telus, Bell and Rogers will claim altruistic intentions to the End of Days, of course, and they’ll want to be as unfettered by “trivial” regulations as possible, but is that really best for all Canadians? Have Rogers, Telus and Bell really proven to us that they have our best interests in mind? I think not.

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{ 4 comments… read them below or add one }

Mark Goldberg April 1, 2010 at 9:36 am

Completely incorrect analysis of the CRTC’s local calling area decision. First off, it dealt with wireline service, not wireless. second, the issue has nothing to do with providing basic service in these communities; it has to do with expansion of the “free” calling area: local service: can a community, say nearby a larger city, petition to have free calling to the bigger city. In a competitive environment, many people have long distance bundled in, or have extended free calling areas. Do people really think about the cost of long distance anymore with 2 cent per minutes available?

The old regime needed to be updated to reflect competition from VoIP, wireless and other carriers that redefine ‘local calling areas’ – which company decides what is included?

In relation to the amended process for the October hearings, it is also incorrect to say that the CRTC will “essentially look the other way.” But that if you read the complete IT World story that you link to, you will see that.

Jordan Richardson April 1, 2010 at 11:14 am

Mark, thank you for your comment.

The IT World story linked to in the first paragraph of the article does indeed refer to “mobile wireless data regulation.” You’ll note, I think, that I am addressing two different issues with this article and two different recent CRTC decisions.

Quoting from the first IT World article’s first paragraph: “(the) wireless industry has convinced the federal telecom regulatory body not to look at whether it should start regulating mobile wireless data services at an upcoming public hearing.” Now I’m unsure how you would word it, but how exactly do you frame the regulator’s “not looking at whether it should start regulating mobile wireless data services” as anything but looking the other way on that issue for the time being? You’ll note that my article says the CRTC is not “dropping” the issue altogether.

The issue of mobile wireless data service does have nothing to do with providing basic service, you are correct. As my article points out, this is essentially a “holding off” of evaluating, again, wireless data regulation.

But what does have to do with providing service to communities is, and I’m quoting now from the second IT World story I link to in my piece, “the way incumbent phone companies deal with requests to expand local calling areas in many cities.”

You’ll note that my article calls attention to the dissent of Louise Poirier and notes, as she notes in her own complaint about this particular issue, that “This strikes me as being unfair to the municipalities in question and their citizens.”

She goes on to outline how the process once in place for several communities, such as how Gatineau and its request to Bell Canada to obtain the expansion of their local calling area was followed up but how analogous requests from smaller communities like the city of Sarnia were not followed up on by Bell. The removal of any sort of regulatory accountability, Poirier rightly argues I believe, leaves communities like Sarnia at the mercy of Bell and its whims to expand the LCA.

The second IT World article further goes on to note, on the second page, the following: “the Federation of Canadian Municipalities also objected, saying the Telus plan would mean incumbent phone companies could decide local calling areas on their own. A number of towns and cities have been waiting in vain for their incumbent phone companies to merge local calling areas, it said.”

These, as my article points out, are valid objections.

So while I appreciate your criticism of my point of view and invite your response gladly, I think you’ll notice that my article was indeed pertaining to both mobile wireless data regulation AND the CRTC’s move to deregulate the way phone companies can deal with requests to expand LCAs. I also think the criticism of the deregulation, as expressed by Louise Poirier, is valid with respect to smaller communities that may be left out of the loop.

Mark Goldberg April 1, 2010 at 1:29 pm

Thank you – I was aware of the fact that your article addressed two different CRTC decisions. My comment Your comment says “article was indeed pertaining to both mobile wireless data regulation AND the CRTC’s move to deregulate the way phone companies can deal with requests to expand LCAs.”

But the article didn’t say phone companies. It says “the wireless industry … managed to scrape at least two points…” Local calling areas have nothing to do with the wireless industry scoring points. It was incumbent local phone companies.

The competition from the wireless industry is a reason why incumbent phone companies are correct in wanting to have had the archaic rules changed. It was incorrect to say that this decision was a win for the wireless industry.

The other place where your comment doesn’t match your article is in reference to service areas. In your comment, you refer to local calling areas. Your article refers to smaller municipalities getting service, leaving the reader believing that this had to do with getting basic dial tone in these communities: “This means that small communities can no longer demand service through approaching the CRTC. Instead, the communities will have to approach the philanthropic phone companies and hope that they’ll get service.”

What is meant by “demand service” or “hope that they’ll get service”? These seem to imply getting telephone service, not getting regulatory intervention in support of their desire to get local calling areas expanded.

You and Commissioner Poirier can disagree about whether market forces or technology substitution will be sufficient for communities like Sarnia – and I have no quarrel with the expression of such an opinion. My comment was directed at the basic facts being laid out. Reading your original article leaves the reader thinking that residents of small communities will risk having no phone service because the CRTC handed wireless companies a victory. That was just plain wrong.

Jordan Richardson April 1, 2010 at 9:31 pm

If my article was misleading for you, I apologize. I included relevant links and sources to ensure that all of the information was included and do not personally think that all readers will inevitably reach the conclusions you did.

You are correct that I did say the “wireless industry scored two points.” I misspoke in that respect and didn’t catch it on my read-through. I am sorry for the error and will fix my wording there. Thank you for catching the error. It should read “the telecom industry” and it now reflects the change. I do apologize for any understandable confusion that may have caused any reader.

With respect to the “demanding service,” I was referring to the LCAs, as you well know and as the source and supplementary material provided indicates. Anyone who takes the time to read the article fully, I believe, will understand that and not reach any false conclusions.

Indeed, the very first sentence before the portions you quote sets up the context for my critique: “The first point was scored when the CRTC elected to deregulate the way phone companies deal with requests to expand service areas.

The facts, then, were there and were clear and the sources were provided to give readers the opportunity to have the complete information.

Furthermore, I do not disagree with Poirier as my comment and my article confirms. I think her criticisms are valid and they form the foundational core of my article.

The fundamental opinion expressed in my article, that the phone companies do not have the best interests of Canadian consumers in mind, still stands. My article addresses the idea of competition as a moralizing force, meaning that the companies will have us believe competition will have them act in our best interests – hence my use of the “scoring of points” for deregulation as a writing device.

So I stand by my opinion and my analysis: I do believe the industry scored “points” here in influencing Canada’s regulators to lean towards deregulation. I do believe the Harper government’s insistence to the CRTC that they ease regulations to “foster competition” could leave some small communities, as Commissioner Poirier says, in a difficult position regarding LCAs. And I do believe that their basic fear of regulations is couched not in a sense of altruism but in a desire for inexhaustible profits.

Again, thank you for catching my mistake regarding the use of the word “wireless.” I do understand how that could lead to some confusion and I apologize for not being more thorough in my editorial process. I realize that the incumbent companies are not necessarily the same as the wireless companies, although in many cases consumers are dealing with the same giants in Telus, Bell or Rogers and so forth.

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