Industry Minister James Moore came out swinging yesterday against the incumbent’s campaign against Verizon’s entry into the Canadian market and a letter from BCE director Anthony Fell. Moore may have been particularly angered at suggestions that the big three were disrespected after a 30 minute meeting with him when few […]
Post Tagged with: "bell"
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.
A Closer Look at How Bell “Welcomes any Competitor” to the Canadian Wireless Market
Bell was in full lobby mode yesterday with major advertisements and a new website arguing against a spectrum set-aside that could open the door to Verizon entering the Canadian market. CEO George Cope’s starting point is that “Bell welcomes any competitor, but they should compete on a level playing field.” Both aspects of this statement merit closer scrutiny.
Of all the incumbent telcos, Bell has been the most persistent in trying to limit or delay the removal of foreign investment restrictions that would open the door to new competitors. For example, Bell Canada’s July 2010 submission to the government’s consultation on changes to the foreign investment rules for telecommunications argued that no changes were needed since there were no problems in the Canadian market:
Why Creators and Consumers Should Welcome the “Netflix Threat”
The examination of the proposed Bell acquisition of Astral Communications took place last week in Montreal with the Canadian Radio-television and Telecommunications Commission hearing from a wide range of supporters and opponents of a deal that only last year was rejected as contrary to the public interest.
As Bell and Astral sought to defend their plan, a familiar enemy emerged – Netflix. What does a U.S.-based Internet video service with roughly two million Canadian subscribers have to do with a mega-merger of Bell and Astral?
My weekly technology law column (Toronto Star version, homepage version) notes that for the past few years, it has become standard operating procedure at CRTC hearings to ominously point to the Netflix threat. When Internet providers tried to defend usage based billing practices that led to expensive bills and some of the world’s most restrictive data caps, they pointed to the bandwidth threat posed by Netflix. When cultural groups sought to overturn years of CRTC policy that takes a hands-off approach to Internet regulation, they argued that Netflix was a threat that needed to be addressed. So when Bell and Astral seek to merge, they naturally raise the need to respond to Netflix.
Why Creators and Consumers Should Welcome the “Netflix Threat”
Appeared in the Toronto Star on May 11, 2013 as Bell and Astral Merger: Netflix Isn’t the Enemy The examination of the proposed Bell acquisition of Astral Communications took place last week in Montreal with the Canadian Radio-television and Telecommunications Commission hearing from a wide range of supporters and opponents […]
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