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Telecom Giants Lure Ex-Cabinet Ministers to their Boardrooms

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Tuesday August 16, 2011
Appeared in the Toronto Star on August 14, 2011 as Telecoms Lure Ex-Ministers in Boardrooms

Telecom policies, particularly Internet and wireless issues, have generated enormous public interest over the past year. Politicians have evidently taken note with all political parties expressing concern over Internet data caps, net neutrality, and the competitiveness of Canadian wireless services.

The political shift toward consumer-focused telecom concerns has unsurprisingly attracted the attention of the large incumbent telecom providers such as Bell and Telus, who have found their regulatory plans stymied by political intervention and the admission by some Canadian Radio-television and Telecommunications Commission commissioners that the current policy environment has failed to foster sufficient competition.

The incumbent telecom providers recently served notice that they are gearing up to fight back, with Bell adding former Industry Minister Jim Prentice to its board of directors and Telus doing the same with former Public Safety Minister and Treasury Board President Stockwell Day. The addition of two prominent, recently departed Conservative cabinet ministers makes it clear that Bell and Telus recognize the increasing politicization of telecom policy.

The addition of former politicians to telecom boards is nothing new. As Carleton professor Dwayne Winseck recently chronicled, the path between politics and telecom boardrooms is well trodden, with the likes of Brian Mulroney (Quebecor), former Liberal cabinet minister Ed Lumley (Bell), former BC Finance Minister Carole Taylor (Bell), and former Ontario premier David Peterson (Rogers) all making the jump. Moreover, former New Brunswick premier Bernard Lord heads the Canadian Wireless Telecommunications Association.

The mix between politics and telecom policy is nothing new either. Since its very beginnings as an industry, telecom and competition regulators have played a crucial role in establishing the limits of companies that have frequently enjoyed near-monopolistic market power.

While politics and telecom have been frequent bedfellows, this round of appointments signals an important shift. The companies were at pains to emphasize that the addition of Prentice and Day is not about lobbying per se since both face five year "cooling off" periods under the Lobbying Act before they can formally lobby their former colleagues.

Yet there is no need for Prentice or Day to engage in formal lobbying. Bell alone has registered over 30 meetings with politicians and government officials since the start of 2011. Given its ability to garner weekly government meetings, access is clearly not a concern.

Rather, it is the emergence of consumer-oriented voices at the very time that government is preparing to establish the broadband and wireless rules that will govern the sector for years to come. The CRTC was long viewed as the most important regulatory channel (hence the revolving door between Commission staff and telecom companies), but the government has left little doubt it is prepared to intervene early and often if it disagrees with Commission policy.

Given the sheer number of policies on the agenda - spectrum allocation, data caps, net neutrality, foreign investment, copyright, Internet provider liability, lawful access, digital economy strategy, and the appointment of next CRTC chair among them - telecom policy has moved across the river from the CRTC's Gatineau offices to Parliament Hill.  

This represents a big shift and garnering inside information into the backroom mechanics of the current government's decision makers provides an enormous advantage for Bell and Telus since Prentice and Day held ministerial responsibility for all these issues during their time in government.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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