The proposed Rogers – Shaw merger has placed Canada’s competition law and policy back into the spotlight as consumers frustrated by high wireless prices and a market that many believe already suffers from insufficient competition face the prospect of even less competition should the deal be approved. Last week, the House of Commons Standing Committee on Industry and Technology agreed, issuing a recommendation that “the Committee believes the merger should not proceed” and identifying the need for conditions in the event that it does.
Vass Bednar, Ana Quarri, and Robin Shaban recently conducted an extensive study for the Ministry of Innovation, Science and Industry on competition in data driven markets in Canada. Vass, the Executive Director of McMaster University’s Master of Public Policy (MPP) in Digital Society Program, Ana, a recent graduate of McGill University Faculty of Law, and Robin, co-founder and senior economist at Vivic Research, join me on this week’s Law Bytes podcast to discuss their study, the intersection between competition and digital and telecom policy, and their proposed reforms to reshape Canadian competition law.
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When the proposed Rogers – Shaw merger was announced last month, it immediately became a flashpoint for Canada’s ongoing debate over wireless competition and pricing. The Standing Committee on Industry, Science and Technology moved quickly to put the proposed merger under the microscope with hearings that have included Rogers and Shaw along with academics, competitors, and regulators. I was invited to appear before the committee and provide my take on the implications of the merger. This week’s Law Bytes podcast goes inside the virtual hearing room with my short opening statement followed by clips of the Q &A with several Members of Parliament.
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Canadian Heritage Minister Steven Guilbeault was recently asked about his plans to mandate licensing of links to news articles on social-media sites such as Facebook. While the policy is often referred to as a link tax, Mr. Guilbeault insisted that it was not a tax, stating “some people think every time the government acts, it’s a tax. What I’m working on has nothing to do with tax.” Instead of a government tax scheme, Mr. Guilbeault explained that he intends to have the Copyright Board of Canada set a fee for the links to articles, backed by government power to levy fines for non-payment.
Leaving aside the semantic debate over what constitutes a government tax, my Globe and Mail op-ed argues that the comments are notable because when it comes to addressing the concerns associated with the large technology companies, Canada should be working on taxation. Mr. Guilbeault has said his top legislative priority is to “get money from web giants,” yet rather than focusing on conventional tax policy, his preference is to entrench cross-subsidy programs that keep the money out of general tax revenues and instead allow for direct support to pet projects and favoured sectors.
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In the months before the coronavirus outbreak, numerous governments around the world enthusiastically jumped on the “regulate tech” train. Digital tax proposals, content regulation requirements, national digital spending mandates, as well as new privacy and data governance rules were viewed by many as essential to respond to the increasing power and influence of digital giants such as Google, Facebook, Netflix, and Amazon.
My Globe and Mail op-ed notes the pandemic has not only sparked a massive shift in economic and health policy priorities, but it is also likely to reorient our views of the tech sector. Companies that only months ago were regarded as a threat are now integral to the delivery of medical equipment, critical to the continuing function of workplaces in a work-from-home world, and the platforms for online education for millions of students. Billions of people rely on the sector for entertainment, communication with friends and family, and as the gateway to health information.
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This week’s report that Canada is an outlier on wireless services with carriers generating more revenue per SIM than carriers in other countries and Canadian consumers on the low end of data usage, represents the latest in a long line of similar independent reports that confirm Canada’s status as a high-cost, low usage wireless market. Indeed, a government-commissioned comparative study, CRTC data, OECD data, and Rewheel Research all tell a similar story. Given that there is little to debate about the state of Canadian wireless pricing, the big question is now what Innovation, Science, and Economic Development Minister Navdeep Bains is prepared to do about it.
A new book from long-time Rogers executive Phil Lind provides insights into the backlash that any significant efforts to inject more competition into the market is likely to face from the incumbent carriers. The book contains several pages recounting the carrier battle in 2013 against Verizon entering the Canadian market with the active support of the then-Harper government. The story pulls back the curtain on lobbying efforts that involve active coordination by top tier executives at each company, active lobbying of MPs, journalists, and market analysts, as well as advertising campaigns designed to fight back against market-opening policy measures. Lind starts the story:
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