As Canadian telecom operators, broadcasters, and broadcast distributors become single entities – Rogers combined with City-TV, Quebecor’s ownership of Videotron, Sun Media, and Groupe TVA, Shaw having purchased Canwest Global, as well as Bell in the process of merging with CTVglobemedia – the biggest hurdle may well be fears about the cultural impact of opening up telecom companies to foreign buyers.
While the link between broadcasting and Canadian culture is obvious, the connection between Canadian broadcasting ownership and Canadian culture is tenuous at best.
The Canadian content requirements apply to television, radio, and specialty television stations. Television stations must carry a certain percentage of Canadian content, with additional requirements for “priority programming†that includes Canadian dramas, documentaries, music, and variety shows. At least 35 percent of music played on radio stations must be Canadian in order to meet Cancon requirements.
Many observers appear to assume that Canadian ownership and content requirements go hand-in-hand, fearing that a foreign owned broadcaster would be less likely to comply with Canadian content requirements. Yet there is little reason to believe this to be so.
The Canadian Radio-television and Telecommunications Commission’s active involvement in setting Canadian content requirements is a direct result of Canadian-owned broadcasters regularly seeking to limit the amount of Canadian content they are required to broadcast. Producing original Canadian content is simply more expensive than licensing foreign (largely U.S.) content. These fiscal realities – and the regulations that have arisen as a response – remain true regardless of the nationality of the broadcaster.
Foreign owned businesses face Canadian-specific regulations all the time – provincial regulations, tax laws, environmental rules, or financial reporting – and there is little evidence that Canadian businesses are more likely to comply with the law than foreign operators.
Cultural businesses may raise particular sensitivities, but broadcasters that are dependent upon licensing from a national regulator can ill-afford to put that licence at risk by violating its terms or national law.
In fact, a review of other developed countries reveals that many have eliminated foreign ownership restrictions in their broadcasting sector but retain local content requirements. For example, Australia has no foreign ownership restrictions on broadcasters (Canwest was once the majority owner of one of its television networks), yet employs a wide range of local content requirements.
The same is true in many European countries – Germany has eliminated foreign ownership restrictions but retains daily regional programming requirements, Ireland has no foreign ownership restrictions but establishes programming requirements for each broadcast licensee, and the Czech Republic has dropped its foreign ownership restrictions but relies on broadcasting licences to mandate local programming.
In the absence of content requirements on private broadcasters, some countries rely more heavily on their public broadcasters to be a key source of domestic programming. For example, Norway does not have foreign ownership restrictions but has established regional programming requirements for its public broadcaster (in addition to local programming expectations in the licensing process).
Although few are calling for Canadian broadcasting to be opened to foreign ownership, the reality is that the cultural concerns associated with greater foreign ownership are vastly overblown. As a growing number of viewers venture outside the traditional broadcasting system for their news and entertainment, the cultural community must find better tools than foreign ownership restrictions to help support the creation and broadcast of Canadian content.
fear
we need a grandaugthered herst incident to put some real fear into the Canadian conglom heart.
more forgien ownership is dandy. i might even start watching TV again… but that’s kinda iffy.
packrat
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First we should ask the question “what are we really trying to achieve?”
Globalization for globalization’s sake? How does it work for our southern neighbors? Is it an objective worth pursuing? We can see the costs, but what are the benefits?
Nap.
RobAntonio345@yahoo.com
Define “Canadian Culture” eh?
The benefits are we retain the Canadian content, but allow open market competition to reduce prices.
This is all about the lack of political fortitude.
Open the market, avidly enforce the rules about Canadian content and watch the strangle hold that we currently have, fade.
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@Baloo:
So we should blindly trust that “free market forces” will automagically solve it for us?
I can give you telecom examples where “opening the market to foreign competition” eventually lead to increased prices, poorer service and lowered competition.
Nap.
You can’t legislate culture
I’ve always been of the opinion that you can’t legislate culture. Canadians mostly watch American TV as it is. Allowing foreign ownership of broadcasters won’t make things any worse than they already are. Not to say that not watching Canadian TV is a bad thing. People will watch what they want to watch. This may have made sense 50 years ago when all we had was 3 channels. But now that everyone has cable, satellite and/or the internet, the ownership of the “Canadian” channels doesn’t really matter much as most people just flip to another channel.
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@Kibbee: “Canadians mostly watch American TV as it is. ”
Should we keep CBC or dispense of that one too? We would “save money” wouldn’t we?
nap.
@Kibbee
“But now that everyone has cable, satellite and/or the internet”.
Be careful about such absolutes. I know a lot of people that get their TV over the air, no cable or satellite. In most cases, those same people have restricted or no access to the high speed internet of the third option. However, I agree that, given the content requirements, ownership is less of an issue than many seem to think. Of course, I can just imagine the hub-bub if Fox decided to set up a news channel in Canada, given the furor that erupted when Quebecor started to set up Sun TV News.
@Napalm: I agree that competition does not always lead to lower prices. By way of illustration, gasoline prices. The city of Ottawa has more stations (representing more companies) but higher prices than if you go 15 km out of the city limits… some of that can be attributed to municipal taxes, but that doesn’t account for all of the difference. And yet the gas comes from the same refinery.
@Napalm
No doubt you can, but I can point at telecom competition where real savings are there for consumers – try the a UK as a good example.
No three year contracts, all you can use tariffs and sensible pricing.
There is no “blindly following” anything in competition. It can lead to lower prices. However, without competition the certainty is, prices will rise.
Canadians are being overcharged on telecoms & internet, this is because of the closed business environment. Do we really want no change and rising prices.
The open market works in many countries and as Michael points out, “the reality is that the cultural concerns associated with greater foreign ownership are vastly overblown. ”
I whole heartedly agree.
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Yes, we do need to remove foreign ownership restrictions… on telecom, ISPs and digital TV providers. Since they own most of the TV stations and radio station in Canada, it will kill several birds with one stone.
Less & less relevent …
Protection for Canadian content is becoming less relevant. Not because I do not think it is worth protecting (it is), but because it is becoming less possible to do so. Globalization of easy access to a variety of programming through various means is only going to continue.
This, like anything else, will have its pros & cons. We are being exposed, or at least have the option, to a greater variety of cultural content outside of our own, which could lead to greater enrichment and understanding. Of course we also have the possibility of or own cultural programming being lost in the flow. The caveat being the content we produce being of sufficient quality to be of interest not just at home but abroad. So in a global environment does legislative protection of Canadian media encourage content that is competitive on a world stage or stifle it? Contrarily, would a free market approach even be viable due to a few elephants in the play field? All thoughts to consider in a new digital media reality.
>the biggest hurdle may well be fears about the cultural impact of opening up telecom companies to foreign buyers.
There will be no cultural impact as we’ve been watching 98% US consumable entertainment for ages.
We should open the Canadian communications markets (yes, telecom & broadcasting) to foreign investment. There is too much integration in the Canadian communications sector, which off course, was encouraged by government policy and the CRTC. Those policies created the so-called “converged” companies that now dominate the provision of “bundled services” and these companies would not flinch in crushing any competition, especially from undercapitalized smaller players. We need to attract one or two global players to bring meaningful competition, and such competition, together with greater access to foreign capital, will spur innovation and improve productivity, which will lead to better pricing and services for consumers and businesses. This would also instil these companies to focus more on the global market; instead of stubbornly concentrating on Canada. Despite Canada’s proximity to the US and similarities between the two markets, one should wonder why the Bell and Rogers of this country did not bid for spectrum in the US when that market opened up decades ago. Instead, it was a European company, Deutsche Telekom (from completely different operating environment) that successfully entered the US market (T-Mobile). Opening up will give us the confidence, competitive spirit and resolve to think outside of our little box.
Broadcasting is dead…broadcasters just don’t know it yet
I recently purchased a streaming media player for my living room to replace my media PC. The world of online streaming content has now been opened to me. Sure I still have to live with silly rules like not being able to watch a CBS broadcast from their website (without using VPN technology), but can see the same show on CTV’s website. However, the majority of what I am now watching is Internet Broadcasting TV shows that have no boundaries. CanCon be damned, I will watch the entertainment I want to watch and not what some regulatory dinosaur like the CRTC says I should be watching. Good content is good, regardless of country of origin. This type of “programming” means current broadcasting distribution is on its way out.
the theory that foreign ownership will somehow negatively affect Canadian culture is just as big a myth as UBB being “fundamentally fair”. It’s more bs shoved down our throats by big telecom, lobbyists and politicians that work for them.. Open it all up.. let them reap what they have been sowing for years.
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@Tian: “We should open the Canadian communications markets (yes, telecom & broadcasting) to foreign investment. There is too much integration in the Canadian communications sector, which off course, was encouraged by government policy and the CRTC. ”
So what is the root cause? Regulatory failure or insufficiency of Canadian capital?
If we have a regulatory failure then the nationality of the capital won’t make any difference. Would you feel any better if Carlos Slim could buy the big three and create a new Bellmex as the sole “canadian” telecom company?
Nap.
@Nap.. “Would you feel any better if Carlos Slim could buy the big three”
Foreign ownership does not imply a migration from a duopoly to a monopoly. I don’t quite understand how you have made the leap that allowing more foreign ownership means we also scuttle any controls on monopolistic behavior. In fact, the intent is to expand the competitive landscape, not shrink it.
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@oldguy: “Foreign ownership does not imply a migration from a duopoly to a monopoly.”
Big capital is selectively looking for monopolies. It won’t come unless it smells one.
Small capital – we already have in Canada. Why isn’t it engaging? I’ll let you answer.
Nap.
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@oldguy:
Somewhere on the internet there is a scientific study about poker. It says that if the players are intelligent and start with enough funds to play for a really long time until one of them wins it all; it is the player who starts with most money that will win.
What the proponents of “free market” (i.e. “unregulated market”) conveniently fail to mention is that it works pretty much like the poker game.
If what we’re facing is a regulatory failure, then bringing a 4th player with more capital then the other 3 combined will ensure that the whole thing will end up in a monopoly owned by this new player.
In order to avoid this not-so-happy-ending you should fix the regulations first. But if you do that, then you’ll notice that you don’t need to introduce the 4th player anymore.
Nap.
Cancom?
I am not sure how relevant the Canadian content angle is here. If a company like the American Clear Channel came along and bought up all the radio stations in Canada they are just as likely to play the same six Celine Dion songs over and over again as anything else. That is more or less what they do in the American market and would not be the desired result.
I do not think that opening the Canadian broadcast industry to foreign competition will provide any long term benefits unless we fix the environment that caused the problems in the first place. Otherwise we will just have different owners for the single media conglomerate that will be left in the end…
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@bwalzer:
I have two radio stations stored in my car’s radio memory.
One is Jazz.FM. It plays the same old songs over and over again. But I like those songs.
The other is Radio Canada. It keeps playing new songs from new artists I never heard before and some of them are really good/fresh and I can end up with buying some new CDs for my collection.
I switch between the two depending on my mood. Sometimes I just want the old tried and true. Some other times I feel adventurous and want to try something new.
Nap.
@Nap..”Big capital is selectively looking for monopolies. It won’t come unless it smells one.”
While I would agree with the first sentence as an intent, I don’t agree with the second sentence. Can you expand on your rational for such a statement?
“Small capital … Why isn’t it engaging? ”
The analysis involved in the recent UBB billing discussions should cover this, no need to repeat it. What it boils down to is that “small capital” simply cannot build out their own “last mile” except in very selective (small) situations. There are multiple “solutions” to the issues UBB has exposed, of which allowing foreign “big capital” investments is only one possibility. To extend those selective solutions into larger venues will require “big capital”, from somewhere.
Even within our current regulatory framework, Rogers or Shaw cannot buy up Bell or Telus. That part of the framework has nothing to do with foreign ownership constraints, and need not change. Likewise Canadian content constraints can still exist.
If we keep the regulatory constraints surrounding monopoly “buy up” and Canadian content, what is the rational for keeping the foreign ownership constraints?
@Nap.. “free market … works pretty much like the poker game.”
To a certain extent, such an analogy works. But the rules don’t change frequently in a poker game, as they do in a market. New technologies, etc. Likewise the implied assumption of “intelligence” doesn’t always exist in a poker game, nor in a market. Drawing a comparison between poker and business investment/practice only works on a simplistic level.
Even so, there are regulatory frameworks that prevent all the players, except one, from being dropped from the table. Not the purest form of “free market”, but those regulations prevent the situation you are describing. If you were to change the rules of that poker table so you are *never allowed* to be the only player at the table, what happens to your game theory analysis?
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@oldguy: “But the rules don’t change frequently in a poker game, as they do in a market. New technologies, etc.”
Well there’s definitely the same “randomness” aspect in poker too, wouldn’t you think? One gets the aces and the other the deuces…. one lays TV cable under CN Tower while the other is milking the lucrative phone market…. then things change and one can pump TV, internet an VOIP through the cable while the other is rewiring with fibre…. but what was described as “vertical market integration” is the “natural” tendency of a big capital to continue growing through mergers and acquisition until it becomes one single big capital – a monopoly. The last player at the table, gathering all the chips.
Nap.
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@oldguy: “If you were to change the rules of that poker table so you are *never allowed* to be the only player at the table, what happens to your game theory analysis? ”
Would you engage in a game of poker where would never be allowed to leave the table with the chips when you win? But forced to stay there and start a new round with new players?
Nap.
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@oldguy: “If we keep the regulatory constraints surrounding monopoly “buy up” and Canadian content, what is the rational for keeping the foreign ownership constraints? ”
When you’re big enough you get to make the rules. It’s called “lobbying”.
Interesting how we get this UBB pushed by the player with the biggest market cap? And it’s just a coincidence that he has the slowest network; they actually support UBB because it’s good for the consumer:
http://www.bell.ca/shopping/PrsShp_Bell_Internet-usage_based_billing_UBB.page?regionToggle=true&languageToggle=true&content=/jsp/page_layouts/directory.jsp&metaKey=PrsShpGnl_Content&province=UNKNOWN&myurl=CSQ&mobility_upgrade=false&content=/jsp/page_layouts/directory.jsp&metaKey=PrsShpGnl_Content®ion=ON&language=en
Nap.
rofl
I was reading it again. Maybe I was wrong all this time and they have a point. Here’s a nice example of corporate speech:
“Bell offers retail usage packages from 25 gigabytes (GB) to 75 GB a month. Customers can buy even more at affordable prices – $5 for 40 GB more, $10 for 80 GB, $15 for 120 GB.”
Technically correct. But they conveniently omitted to mention their “Essential Plus” offer with a 2GB/month cap, so the whole sentence may mislead you into thinking that their plans start at 25GB/month.
Nap.
dfssfdsf
If AT&T bought Bell, it’s not like they’re going to deploy fiber directly to your home. In fact, AT&T is doing the EXACT same thing as Bell-fiber to the node (the last mile is still copper). Also, if you want to further enhance competition in wireless, DO NOT hand out spectrum to CABLE companies. As we have seen with Videotron, cablecos (not telcos) will bundle wireless with their gigantic TV/internet/Voip phone subscriber base, and thus creating no chance for competition in wireless.
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@Mike: You’re overestimating the power of bundles. I personally have a mix of Bell, Rogers and Petro-Canada services (yes, Petro-Canada, did you know that they offer wireless?). This way you can tailor the services exactly to your needs. When you go bundle, you will end up overbuying one or more services, with the bundle discount not always compensating.
As for Videotron. Yes, I heard stories that they bought more spectrum that they needed just to make it unavailable for the other new entrants. But not everyone did that. If true this would be something to investigate under the Competition Act. Oh wait. That’s Quebec. They have their own rules.
Nap.
Keep it Canadian
For me, it has less to do with the “Canadian content” part, and more to do with the “corporation” part. I like my corporations owned by me and my neighbours. It’s safer, in the long-run.
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@Randy: “I like my corporations owned by me and my neighbours. It’s safer, in the long-run.”
Makes sense. Also they have to pay their taxes here not in Cayman Islands. And you can litigate with them here not in Texas.
I am generally on the principle that overall it’s better to do something yourself if you can than outsource it for a penny per dollar “savings”.
In this rush for “saving money” we should observe though to not destroy the things that we were saving for in the first place.
Nap.
@Nap..”the same “randomness” aspect in poker too”
Although there is a “randomness” in both business and poker, the rules are consistent in poker. Although the analogy is starting to get really distorted, it might be like a full house beats 3 of a kind, but it sometimes doesn’t beat 2 or 3 of them, and only sometimes. The “rules” change in business, as well as dealing with the random factor.
“The last player at the table, gathering all the chips”
And that is what the regulatory framework is there to prevent.
“Would you engage in a game of poker where would never be allowed to leave the table with the chips when you win? But forced to stay there and start a new round with new players?”
And here is where your analogy between business and poker breaks down completely. As long as a business is allowed to take money away from the table, while continuing to play, they will play. Taking money away may change their chances of “winning”, so it is a balancing act between “poker money” and “shareholder money”.
As I mentioned earlier, the analogy breaks down if you go beyond a simplistic comparison.
“When you’re big enough you get to make the rules. It’s called “lobbying”. ”
I’n not sure where foreign ownership constraints would change this, can you expand on exactly how this would change with/without such constraints?
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@oldguy:
“And here is where your analogy between business and poker breaks down completely.”
In business “winning” is when you elminated competitors and get into a monopoly position so you can control the market, hold the government and population hostage and jack up prices to your like. If you’re not allowed to do that Mr. Big Capital won’t bother to sit at the table. In poker it’s when you get all the chips and can keep them.
“When you’re big enough you get to make the rules. It’s called “lobbying””
I’n not sure where foreign ownership constraints would change this, can you expand on exactly how this would change with/without such constraints?”
Imagine that instead of Mirko Bibic “lobbying” CRTC you get Barak Obama “demanding” regulatory changes and threatening with trade sanctions.
Nap.
This issue is not about so-called “Canadian culture” it is only about money and who gets it.
Culture? Canada has no culture or even a distinct identity. This issue at its core is all about money and who gets. Any talk that foreign investment will imperil so-called “Canadian culture” is silly. The Canadian media manufactures this kind of talk. The same Canadian corporations that own media assets, own the broadcasters. It’s called media concentration and it is a big problem in Canada. These media corporations want people to believe that so-called “Canadian culture” could be at risk of extinction if foreign investment is allowed. In an effort to sway public and government opinion in their direction these Canadian corporations are propagating a self-serving false message, using their media assets, that foreign investment and competition will make Canadians less Canadian.
@Nap.. “In business “winning” is when you elminated competitors and get into a monopoly position so you can control the market, hold the government and population hostage and jack up prices to your like. If you’re not allowed to do that Mr. Big Capital won’t bother to sit at the table.”
Here is where we disagree strongly. In every business I have been involved in, “winning” is simply staying in business and making enough ROI to justify the time and effort. The difference between “big capital” and “small capital” is the size of the “I” in ROI. They will sit at any table that appears to offer enough “R”. If the only criteria for “winning” is to gain and hold a monopoly position, then 99.999% of all businesses are “losers” already. Since they are still “sitting at the table”, I think you might need to reconsider your criteria for “winning”.
Gaining monopoly status dramatically changes a business. It doesn’t matter if it is by accident or design. Healthy business practices become unhealthy, for everyone. That’s why the pure “free market” has been modified by regulations that attempt to prevent any company from achieving that position, or if it does achieve that position, controls how it must behave.
“Imagine that instead of Mirko Bibic “lobbying” CRTC you get Barak Obama “demanding” regulatory changes and threatening with trade sanctions.”
I don’t need much imagination for that, it already seems to be happening.
I still don’t see where foreign ownership constraints materially changes that picture. Can you detail the differences? Set up a realistic scenario and show how constraints on foreign ownership materially affect the lobbying situation. What would happen with ownership constraints, and without?
@Nap..”they have to pay their taxes here not in Cayman Islands. And you can litigate with them here not in Texas.”
General Motors, Ford, Toyota, General Foods, Motorola, IBM, Microsoft, etc. All these companies have significant foreign ownership investments in Canada. If you ignore the recent corporate profitability issues and focus on the foreign ownership side of things, how would things be materially different if we had similar constraints in these industries? Taxes? They pay Canadian taxes. Litigation? Happens right here under Canadian law. There are lots of examples of industries that don’t have constraints on foreign ownership. Look to how these businesses and industries already operate for comparisons to the “what if” of allowing foreign ownership of Canadian Broadcasting businesses. I don’t deny that some things might be different, but the differences are nowhere near the areas you are suggesting.
Foreign investment/ownership doesn’t change the principles under which a Canadian business operates. It still has to have a Canadian business license, it still operates under Canadian law.
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@oldguy:
“In every business I have been involved in, “winning” is simply staying in business and making enough ROI to justify the time and effort.”
“Winning” is about winning over your competitors and taking their business for yourself. If you’re just mucking around then you’re not really competing. And wasn’t “increased competition” the whole purpose of this exercise?
“That’s why the pure “free market” has been modified by regulations that attempt to prevent any company from achieving that position, or if it does achieve that position, controls how it must behave. ”
At least we agree that “free market” ends up like the poker game: the winner takes it all.
As for Obama: right now he can’t just call Harper and “demand” that AT&T buys Bell. That would look outrageous to any spectator.
But if you voluntarily create this possibility, you’ll then have Obama “demanding” all kind of changes that will make the deal the sweetest ever. For US and AT&T of course.
Nap.
@oldguy
Regarding your comment: “In every business I have been involved in, “winning” is simply staying in business and making enough ROI to justify the time and effort. The difference between “big capital” and “small capital” is the size of the “I” in ROI. They will sit at any table that appears to offer enough “R”. If the only criteria for “winning” is to gain and hold a monopoly position, then 99.999% of all businesses are “losers” already. Since they are still “sitting at the table”, I think you might need to reconsider your criteria for “winning”.”.
You are correct, however, consider the situation where the company, as a result of competition or regulation is not making sufficient ROI. What do they do then? If they can walk away, then we are left with one less competitor, possibly even a duopoly or a monopoly. Napalm’s question of, if they aren’t allowed to walk away, comes into play, since they won’t be able to stem the losses short of bankruptcy protection once they are in the game. In that sense, I can see where he is coming from. It is a little extreme certainly, however isn’t the goal of the business to maximize the ROI? How better than to only service the parts of the country that are cheap to provide service to, and to aggressively eliminate the competition in those areas?
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@Anon-K: “How better than to only service the parts of the country that are cheap to provide service to…”
Which is exactly what the “new entrants” in the wireless market are doing right now, using subsidized spectrum.
Call me Edna if any of them plants an antenna into some rural area.
Nap.
Where’s My Eggo ?
Here’s just one example, in a virtual sea of other foreign-owned examples/applications:
What about Skype ???
Skype is foreign-owned, and yet almost every Canadian-with-Internet uses Skype, probably even the CRTC members as well as Bell Rogers corporates… mmmm?
SO WHERE is “Skype-IN” in Canada ?, I asked way back in 2004 ?, sure in Canada you can have Skype-OUT, but Skype cannot give you an actual Skype-IN phone number because “our” CRTC,…. etc will not allow it. ehhhm 🙂
In fact, Canada is about the only country left in the world that still blocks Skype-IN from Canadians who obviously pay these ridiculous ISP-rates here, and yet we don’t have the right to even use it. 🙁
Why?
-because our CRTC is just a puppet-gov’t for the likes of Bell, Rogers, …
Then again, I realized back then, that a Skype IN/OUT with a phone number would be soooo $#!%&#xin;’ cheap that Bell would be all but gone in a year. mmm, I must have been a traitor to even think of that. geeez -I’m sry Bell, can please continue to raise my Cell/Phone/Mobile/…. rates. “…more porridge please Sir…” :(, followed by
“MORE he asks?!” “-hahahahaha”(evil laughter from Bell-Headmaster).
Ok Comon Canada, Lets face it, most of the really cool good stuff is “FOREIGN”-owned, from your CAR to your toaster, …, and even more of it will be, becuase our own Canadian gov’t doesn’t even want support/promote Canadian Manufacturing. “conservative”ly-speking , of course !
🙂
Red Rose Tea -you say ?
“… Canadian dramas, documentaries, music, and variety shows…”
Huuh?
Now that IS funny.
Hey, and don’t forget our world-renowned Canadian blockbuster movies ? -now that’s a laugh.
In fact, what is the name again of our once world-famous Canadian Director again ? ummm oh I remeber now, it was “Steven Spielbourgeoisie” ya ‘dats da ticket.
Almost Anything and/or Anybody that is that good LEAVES Canada, and therefore becomes “FORIEGN” themselves…, from our great Actors’,.., to Doctors, of course the latter having left Canada a long time ago, in droves might I add 😉
Except for my Canadian Documentaries’, which in my opinion are the best in the world, everything else we much rather enjoy the much cooler foreign stuff anyway.
Sad Fact Jack.
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@Rick: “What about Skype ??? ”
How about these?
http://www.freephoneline.ca/
Nap.
…
@Sad Fact: “Hey, and don’t forget our world-renowned Canadian blockbuster movies ? -now that’s a laugh. ”
Huh?
http://www.imdb.com/title/tt0758790/
Would you watch Seinfeld instead?
Nap.
Canadian telecom needs a healthy injection of more players. If that means opening up to foreign ownership, so be it. It’s certainly going to be better than what we have.
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@Chris:
Canadian consumer protection laws need reviewing. I don’t get it why telecom should be a special case regulated by a different “independent” agency and different rules. E.g. generally if you sell me a defective product you have to fix it or reimburse me. But when internet doesn’t work we talk about “congestion”, “heavy users”, “pirates”, “P2P” and how it is acceptable to be throttled to death while continuing to pay for full speed.
If your pump doesn’t have enough gas to fill up my tank I pay just for the gas you managed to pump, not for a whole tank. That is real UBB. While in CRTC’s view it is about having a limit of one tank per month and paying for the whole tank whether the gas station was able to deliver it or not.
It doesn’t matter if you have 4 or 10 or 20 players. They will play withing the same set of rules and if the rules allow for s**t then s**t will happen.
Nap.
@Napalm
This may not be what you had in mind, but have a look at DMTS. They provide service in the Dryden, Red Lake, Sioux Lookout and Fort Frances areas of Ontario. Now if you mean the StatsCan version of “rural”, I don’t know what their coverage is there other than on the main highways plus possibly some of the cottage areas (however, a lot of this is really to deal with the urban customers on summer weekends).
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@Anon: “have a look at DMTS”.
I know. We also don’t hear much from Sasktel. Apparently only Bell “needs” caps & UBB and makes all the headlines in he press.
Nap.
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@Mike: “In fact, AT&T is doing the EXACT same thing as Bell […]”
Correct. Details here:
http://www.dslreports.com/shownews/Exclusive-ATT-To-Impose-150GB-DSL-Cap-Overages-113149
Nap.
@Anon-K.. “as a result of competition or regulation is not making sufficient ROI”
I recognize where Nap is coming from as well. But his discussion points aren’t related to where the investment comes from, foreign or local. I have tried to deal with each of his scenarios as best I can, but the point is still foreign ownership rules. Nothing I can see about his scenarios are directly impacted by foreign or local ownership of corporations. Ownership doesn’t matter, his arguments really boil down to “regulated monopoly” vs “pure free market”, and we don’t really have a “pure” free market anywhere anymore. If a foreign corporation came in tomorrow and was allowed to buy out Bell (or Rogers, or Telus, or Shaw), they would still be required to operate within the same regulatory environment we have today. Foreign ownership rules prevent this, but they prevent foreign capital “startup competition” from entering Canada as well.
If you look back at the history, using Bell, AGT, and BCTel as examples, started as government owned and regulated monopolies. The reasons for those monopolies are still valid, regulated equality of price/service for the “low cost” and “high cost” areas. Exactly Nap’s points and now yours. Somewhere along the line, these government owned entities got sold off. At the time it made political sense to keep the ownership in Canada (a government selling to a foreign corporation isn’t a popular notion) and build up a regulatory framework for these “new” independent entities. Moving along, we have reached the stage where government owned equality of pricing and service levels no longer apply to those Canadian owned corporations, and we don’t allow foreign capital investment to bring in competition. We do have the regulatory framework (good or bad).
It’s a fact that there will always be “high cost” and “low cost” areas of service. The important question is if technology, and economic reality, have moved to the point where we don’t need to subsidize the “high cost” areas anymore. That’s a question I can’t answer in a general fashion. But there are specific examples where startups have proven it is viable without regulated subsidy, and in those cases they eventually become effective monopolies. If a company manages to get close to 100% of a captive market, and a competitor can’t do it better/cheaper, there is no reason for the competitor to start up in the area. But if a company starts to slip or technology moves ahead, those reasons start to appear. That’s an ROI that each company has to consider for themselves. If regulations prevent competition from moving in, a company can slip as far as it wants..
Would new startups focus on the “low cost” areas first? Obviously. That is the fastest way to recoup the initial investment. Historically, the same thing happened with the government owned corporations. Has technology advanced to the point where startups are viable in the “high cost” areas? We won’t know that until we have more capital investment, from somewhere.
I’m not saying Nap doesn’t have a point. I’m saying that he has managed to conflate 2 different issues that shouldn’t be. The only place they “cross” is the question of regulation, can we regulate a foreign owned corporation, operating within Canada, the same as we regulate a Canadian owned corporation? I don’t see why not.
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@oldguy: “I’m not saying Nap doesn’t have a point. I’m saying that he has managed to conflate 2 different issues that shouldn’t be.”
Correct. So let me refer just to the “foreign” aspect only: I wouldn’t like to have Obama making the telecom rules in Canada. We’re already discussing in some other threads on how happy we are with him making the copyright ones.
Nap.
@Nap..”I wouldn’t like to have Obama making the telecom rules in Canada. We’re already discussing in some other threads on how happy we are with him making the copyright ones.”
Again I don’t see the connection. The CRIA isn’t a “wholly owned subsidiary” of the RRIA, even though they share a lot of the same agenda and are very active in “importing” the worst aspects of US copyright law into Canada (while ignoring the positive aspects of US law). There are plenty (and growing) numbers of examples of US citizens that have the same kinds of issues with US law that we have with the attempts by lobbyists to import aspects of US law into Canada.
Look to other examples, like GM, General Foods, IBM, Cisco, etc, etc.. There are plenty of examples of wholly owned corporations operating in Canada, under Canadian law and regulations.
Foreign ownership restrictions don’t change the lobbying aspect. It doesn’t matter if it is a Canadian corporation or foreign “big capital” or a foreign government doing the lobbying, it will happen.
I doubt you can contrive a scheme to eliminate “foreign influence”, no matter what extremes you take it to. The best you can do is to control it, be aware of it at the political level. Transparency. We all operate within a global environment nowadays. Bigger than Canada, bigger than the USA, bigger than any one country (or province, or city). Temper idealism with a pragmatic approach (but don’t lose the idealism!).
Similar story
Here is a similar story
The Federal Treasury says a public foreign land registry may undermine investor confidence in agriculture.
In a submission to the Senate Economics Committee on a proposed private member’s bill, Treasury says foreign investment has made an important contribution to the growth of Australia’s agriculture.
“Changes proposed by the bill to the way sensitive commercial proposals must be made public, including with updates through the FIRB consideration process, are likely to raise significant privacy concerns for business and may help to undermine foreign investor confidence in the agricultural sector more broadly,” the submission said.
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@oldguy: “Again I don’t see the connection. The CRIA isn’t a “wholly owned subsidiary” of the RRIA, even though they share a lot of the same agenda and are very active in “importing” the worst aspects of US copyright law into Canada (while ignoring the positive aspects of US law).”
Well I wasn’t referring to CRIA as it is an association (not an operating corporation with investors and capital). But since you mentioned it could you name the largest 4 members of CRIA.
“Look to other examples, like GM, General Foods, IBM, Cisco, etc, etc.. There are plenty of examples of wholly owned corporations operating in Canada, under Canadian law and regulations. ”
Sure. And Obama would never interfere, would him:
http://www.guardian.co.uk/world/2011/jan/03/wikileaks-us-eu-gm-crops
Nap.
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@oldguy:
As for the “competition” aspect.
If you want to get “fierce competition” like in price wars, then you have to let the players “win” as in “the winner takes it all”. You have to create the possibility of this, otherwise they just all sit at the table killing time and doing a “casual” play.
Now the problem is that if you do that (“free market”, eh?), there are 3 possible outcomes:
1. They just decide to merge
2. They buy each other
3. They compete and the winner takes it all
Note that in only one scenario there would be increased competition (benefiting consumers in the process).
But regardless of the scenario, after it’s over, in the end you’ve got a monopoly to deal with. THE telecom company. And now you’re back to square one, trying to split it back and create “competition” again.
Nap.
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@oldguy:
And now let’s mix “foreign” and “competition” together.
You allow AT&T to enter the game. You still get the same “idle” play so you also need to change the rules to create the “winner takes it all” possibility.
Here comes Obama and “demands” rules that will grossly favor AT&T.
Then you go through one of the three scenarios described in previous post.
And in the end you get the Obama backed AT&T as THE canadian telecom monopoly.
Deal with that now.
Nap.
With proper regulation
Do it in stages and with careful regulation. Remove it for telcom first. If a telecom owns a broadcaster then too bad for them.
The current vertical integration is a sad result of protectionist policy breeding large companies that have incentive to buy everything in Canada. Bell, Rogers etc have no interest in global expansion with the current high margin/low competition environment.
The lack of rules regarding vertical integration needs to be fixed before larger foreign investment can flow into Canada. There should be clear rules on allowing the licencing content to other parties.
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Since DMTS was mentioned:
http://mobile.slashdot.org/story/11/03/16/0118241/In-Virginia-Delivering-Broadband-To-the-Customers-Big-Telecom-Forgot
Nap.
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Heheh:
http://www.bgr.com/2011/03/17/russias-vimpelcom-to-acquire-canadian-carrier-wind-for-6-billion/
Nap.
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Even better:
http://tech.fortune.cnn.com/2011/03/20/att-mobile-att-buys-t-mobile-usa/?hpt=T2
“Increased competition” anyone?
Nap.