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Wednesday June 05, 2013 |
For the past few years, there has been a lively debate on the state of the Canadian wireless marketplace.
Consumer advocates and others have argued that Canadian market is not
sufficiently competitive and that aggressive policy action is needed to
foster greater competition and to adequately protect consumers until
market forces can be fully relied upon. The incumbent telecom
companies and the CWTA present a far different story, contesting
multiple international studies and painting Canada as a market leader.
The events of this week - the introduction of a CRTC consumer wireless code and the Industry Canada decision
to uphold its set-aside spectrum policy by killing the Telus -
Mobilicity deal - point to the fact that this debate is now over in the
minds of the government. Government telecom policy in 2006 was focused
on deregulation and a hands-off, industry-led approach. Those days are
long gone as the government has now adopted a consumer-focused, populist
approach premised on the view that a public fight with the telecom
companies is a political winner.
Moreover, the government may have shifted, but the incumbent providers
clearly have not, failing to adapt to the new policy terrain.
blais, crtc, cwta, paradis, wireless Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareWednesday June 05, 2013 |
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Tuesday June 04, 2013 |
Industry Minister Christian Paradis surprised some analysts this morning by announcing
that the government would not approve Telus plans to purchase
Mobilicity. The decision is entirely defensible. The government
established clear rules on transfers of spectrum that was set-aside in
2008 that prohibited transfer to incumbents within the first five
years. The Telus deal (along with the proposed purchase of Shaw spectrum by Rogers) violated that requirement. To kill the deal
is actually to provide greater marketplace certainty by making it clear
that the spectrum policy rules will be enforced.
The problem is that the government appears to be doubling down on a
single bet - that the combined spectrum of the new entrants (Mobilicity,
Wind Mobile, etc.) can be pulled together into a single, viable
competitor. That was the message the government sent when it lifted
foreign investment restrictions for the new entrants and allowed them to
grow beyond a ten percent market share. Yet by maintaining a host of
other barriers to a strong, competitive wireless environment, the
government's policy is still on the verge of collapse. All the new
entrants are struggling and the incumbents continue to bet that those
competitors will eventually disappear or be acquired after the five year
moratorium expires.
The government needs to do more than simply buy time by enforcing the five year spectrum set-aside rule. As I argued this week,
there are a host of other possibilities, including fully opening the
market to telecom and broadcast distributors (so a new foreign entrant
can offer bundled packages that includes television), tough rules on
domestic roaming and tower sharing, a full set-aside in the forthcoming
spectrum auction, or a regulated wholesale market to create a strong
class of MVNO competitors. Some would go further. For example, Peter
Nowak argues today for structural separation.
Regardless, the government's half-measures and incremental policy moves are a failure. Yesterday, the CRTC took care of its side of the bargain
by firmly addressing several longstanding consumer concerns and
establishing an enforceable code of conduct. It now falls to the
government to admit that its approach to date has failed and that it
stands ready to aggressively address the competition concerns within the
Canadian wireless market. mobilicity, paradis, telus, wireless Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareTuesday June 04, 2013 |
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Monday June 03, 2013 |
This is wireless week in Canada with the CRTC unveiling
its consumer wireless code on Monday and Industry Minister Christian
Paradis scheduled to make an important wireless announcement on Tuesday
morning in Ottawa. In anticipation of the focus on telecom issues, my weekly
technology law column (Toronto
Star version, homepage version) assessed whether Canada's failed wireless policy can be saved.
The column opened by noting that earlier this year, Industry Minister Christian Paradis released the
Canadian government's strategy to increase competition in the
wireless sector. Acknowledging the challenges, Paradis promised to
"continue to pay close attention to what is going on and to make
sure that our policies reflect the fact that we want to achieve the
goal of having more competition."
industry canada, paradis, telecom, wireless Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareMonday June 03, 2013 |
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Monday June 03, 2013 |
Appeared in the Toronto Star on June 1, 2013 as Can Canada's Failed Wireless Policy Be Saved?
Earlier this year, Industry Minister Christian Paradis unveiled the
Canadian government's strategy to increase competition in the
wireless sector. Acknowledging the challenges, Paradis promised to
"continue to pay close attention to what is going on and to make
sure that our policies reflect the fact that we want to achieve the
goal of having more competition."
If Paradis is still paying attention, he will know that the
government's wireless competition strategy now lies in tatters.
Telus has agreed to purchase Mobilicity, one of the new entrants
that was supposed to provide greater competition. Rogers has
agreements in place to purchase previously set-aside spectrum from
Shaw and Quebecor. Meanwhile, rumours abound that the remaining new
entrants will be scooped up by the big three incumbent providers in
short order.
Paradis recently characterized the Canadian wireless pricing as
"middle average", but it appears that the situation is about to
become even worse for Canadian consumers. The incumbents, who bet
that the new entrants would be little more than a short-term blip in
the market, kept their prices steady, deploying cheaper flanker
brands to compete for cost-conscious consumers. If the new entrants
exit the market, most analysts expect prices to quickly rise.
The question now
facing Paradis and the government is what can be done to address
competition concerns that affect consumers and business alike.
The starting point may be to acknowledge that the last round of
policy initiatives failed. A spectrum set-aside in 2008 opened the
door to new entrants, but enormous barriers remained. These included
the slow relaxation of foreign investment restrictions that created
significant problems in accessing capital, the lack of availability
of the most popular devices (such as the Apple iPhone) on new
entrant networks, and the inability to offer attractive bundled
packages that include wireless, television, and home broadband
services.
There are primarily two things that will drive corporate behavior in
any market - competition and government regulation. In the absence
of robust competition, regulation is needed. The Canadian government
should be doing all it can create a more competition, but it must
also commit to regulation - even if temporary - until that
competitive environment develops.
There are several regulatory options available that may ultimately
enhance competition. First, the government should toughen tower
sharing requirements and domestic roaming rules to make it easier to
new entrants to expand their networks. Further, it should remove all
foreign investment restrictions (currently only smaller operators
may be acquired). In fact, it should consider opening up the
broadcast distribution market so that all competitors can offer
bundled packages.
The government could also rethink its approach on the forthcoming
spectrum auction. While it would be unpopular with the incumbents, a
full set-aside geared toward new entrants would virtually guarantee
changes to the competitive landscape. Companies such as Bell and
Rogers already possess large blocks of unused spectrum and the
auction may be the last chance to create a strong, national fourth
carrier.
Another mechanism to generate more competition would be to create a
regulated mobile virtual network operator market. MVNOs typically do
not own spectrum or network infrastructure. Instead, they purchase
network access at wholesale rates from existing operators and offer
it to consumers with their own retail pricing. MVNOs such as
Canadian-owned Ting have become a hit in the U.S. but are not even
available in Canada. By setting the wholesale price, the government
could use regulation to create a new batch of MVNO competitors in
Canada, much as it has tried to do with Internet access services.
On the consumer
side, the Canadian Radio-television and Telecommunication Commission’s wireless
code of conduct, which was released yesterday, is the starting point for
regulation of retail wireless services. The code effectively sets a two-year
limit on wireless contracts, creates caps on data roaming fees to address bill
shock, and requires that carriers offer device unlocking services.
A complete removal of foreign investment restrictions for
communications companies, a full spectrum set-aside, and regulated
wholesale pricing seemed unthinkable a few years ago. Yet as
the wireless policy failures mount, the government must act boldly
if it wants the Canadian market to be anything better than "middle
average".crtc, industry canada, paradis, wireless Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareMonday June 03, 2013 |
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