Earlier this year, the University of Ottawa Press published The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law, an effort by many of Canada’s leading copyright scholars to begin the process of examining the long-term implications of the copyright pentalogy. The book is […]
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Industry Minister James Moore’s Commitment to Wireless Competition, Resolution Style
Whereas the 2013 OECD Communications Outlook ranked Canada among the ten most expensive countries for wireless services in virtually every category;
Whereas the Wall Report commissioned by Industry Canada and the CRTC found that Canadian prices are on the high side in nearly every category of wireless service;
Whereas the Canadian Wireless Telecommunications Association has argued that consumers would be willing to pay more for wireless services and Telus has said that given our geography Canada should be the most expensive country for the wireless services in the OECD;
Whereas Canada has long been one of the only developed economy countries with significant restrictions on telecom foreign investment and has been characterized as the most restrictive in the OECD;
Whereas Bell has consistently opposed or sought to delay changes to the foreign investment rules;
Whereas the government announced a telecom policy last year that opened the door to greater foreign investment and rules designed to facilitate new entrants to the marketplace;
Whereas Telus described that policy as “thoughtful and balanced”;
Telus Flip-Flopping Continues With Latest Lawsuit as Company Changes Its Tune Yet Again
Telus’ decision to file a lawsuit against the federal government over its spectrum transfer rules continues a trend of flip-flopping on policy issues at the company. What does Telus think of the government’s wireless policies? Apparently it depends when you ask. For example, in March 2012, Telus said the following about the spectrum auction approach:
TELUS believes this is a thoughtful and balanced decision that meets the Government’s objectives of promoting consumer choice, supporting sustainable competition through investment in technology and further expanding broadband services in rural markets.
Sixteen months (and the possibility of a Verizon entry) later, CEO Darren Entwistle now says:
There’s going to be a bloodbath, because people are not going to give up on getting that block. So it’s going to be prohibitively expensive and suck a lot of money out of the industry – money that won’t go to infrastructure and technology, money that won’t go into rural coverage or support lower prices.
There is similar change of tune with the latest lawsuit.
Why the Canadian Plan to Encourage Wireless Competition Is Consistent with Many Developed Countries
As the lobby onslaught from Bell, Telus, and Rogers bears some fruit – editorials from the Globe and Toronto Star calling for the government to reverse its position on a set-aside as well as support from the Canadian Council of Chief Executives and from a leading telecom union – it is worth considering whether the Canadian policy differs significantly from other developed economies. The Canadian policy boils down to the two issues: opening the door to telecom foreign investment after years of restrictions and creating a spectrum set-aside to ensure that new entrants (whether domestic or foreign) have a reasonable shot at winning sufficient spectrum to offer competitive wireless services in Canada.
While the big three argue for a “level playing field”, the reality is that Bell, Telus, and Rogers already enjoy enormous marketplace advantages. As I’ve previously discussed, these include restrictions on foreign ownership for broadcast distribution, extensive broadcast assets that Verizon could not touch, millions of subscribers locked into long term contracts, far more spectrum than Verizon would own, and shared networks that saves the companies millions of dollars. In the absence of a set-aside, the incentives for the big three would be to pay far above market price for the spectrum in order to keep competitors out of the market. In other words, Bell, Telus and Rogers will massively over-pay for the spectrum to keep out Verizon unless the government establishes a policy that precludes them from doing so.
The incumbent talking points might lead some to believe that the Canadian policy is dramatically different from other countries (Bell has been talking about how the U.S. would never grant equivalent access, while the Globe speculates that perhaps the policy is “the result of a drafting error”). Yet a review of recent spectrum auctions in other OECD countries indicates that the twin policy of encouraging foreign investment plus establishing set-asides to facilitate competition is very common. The biggest difference between Canada and many other developed economies is that Canada is late to opening its telecom market and is therefore doing both at roughly the same time. In other countries, foreign investment restrictions in the telecom market were removed years ago.
Canada’s Lawful Access Bill Appears to Have Contained a Provision to Enable PRISM-Style Surveillance
As the revelations about U.S. secret surveillance continue, one of the more interesting recent articles was a Buzzfeed piece that focused on a Utah ISP that hosted a “little black box” in the corner inserted by the National Security Agency. The article describes how a Foreign Intelligence Service Act (FISA) warrant allowed the NSA to monitor the activities of an ISP subscriber by inserting surveillance equipment directly within the ISP’s network. The experience in Utah appears to have been replicated in many other Internet and technology companies, who face secret court orders to install equipment on their systems.
The U.S. experience should raise some alarm bells in Canada, since the now defeated lawful access bill envisioned similar legal powers. Section 14(4) of the bill provided:
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The Law Bytes Podcast, Episode 237: A Conversation with Jason Woywada of BCFIPA on Political Party Privacy and Bill C-4 
Lawful Access on Steroids: Why Bill C-2’s Big Brother Tactics Combine Expansive Warrantless Disclosure with Unprecedented Secrecy 
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