The government’s decision to prorogue Parliament and launch a new legislative agenda later this month offers more than just an opportunity to recalibrate economic priorities in light of the COVID-19 global pandemic. My Globe and Mail op-ed notes that less than 12 months after the 2019 national election, Canada’s digital policy agenda has gone off the rails and is badly in need of a reboot.
Telecom by yum9me (CC BY-NC-ND 2.0) https://flic.kr/p/53jSy4
Bains’ Other Wireless Affordability Problem: The Broadcast Panel Plan for WhatsApp, Skype and Other Internet Services to Pay Canadian Broadband Taxes
Navdeep Bains, the Minister of Innovation, Science and Industry today promoted the government’s plans for wireless affordability. The effort was largely an attempt to reiterate its wireless affordability platform, which targeted a 25 per cent reduction in consumer wireless bills by emphasizing more competition through MVNOs and spectrum set-asides. The renewed emphasis on the policy comes as an updated Wall Report finds that prices have been declining in some baskets (the long-overdue emergence of unlimited-ish plans a key factor), but not in the core middle tier of plans where prices remain high. The government states “Canadians have been paying more overall compared to consumers in other G7 countries and Australia” and noted that the government will track pricing on a quarterly basis starting from January 2020. Coming on the heels of threats from incumbent telecom companies such as Telus, it was good for the government to re-assert its policy objectives for the sector.
The CUSMA Culture Poison Pill: Why the Broadcast Panel Report Could Lead to Millions in Tariff Retaliation
As Parliament continues its review of legislation designed to implement the Canada-U.S.-Mexico Trade Agreement (CUSMA), I have had the honour to appear before both the International Trade and Industry, Science and Technology committees to discuss the digital implications of the trade agreement. While Members of Parliament have expressed concern with copyright term extension that could cost millions of dollars and restrictions on future privacy safeguards, the issue that has sparked the greatest surprise arises from a provision frequently promoted as a “win” during the negotiations.
My Globe and Mail op-ed notes that the inclusion of a cultural exemption was viewed as an important policy objective for the government, with Prime Minister Justin Trudeau insisting “defending that cultural exemption is something fundamental to Canadians.” The USMCA does, indeed, feature a broad cultural exemption that covers a wide range of sectors. The exemption means that commitments such as equal treatment for U.S., Mexican and Canadian companies may be limited within the cultural sector.
The big headline story from the first week of the CRTC hearing into the wireless market was undoubtedly Telus CEO Darren Entwistle closing hours of testimony with a threat to slash investment and jobs if the Commission follows through with a mandated MVNO model. Entwistle told the CRTC:
There’s been a lot of conjecture related to disinvestment or reduced investment. It’s been a high topic related to what will happen as it pertains to MVNOs being introduced or another 25 percent price reduction being enforced, having already bettered the existing one that’s in place. And there are some views that this is just theatre perpetrated by the incumbents, in that if mandated MVNOs come to fruition or there’s an enforced second tier 25 percent reduction we will go on with status quo investing.
So one of the additional things I would like to file with you in confidence that I brought here today is a Board resolution at TELUS signed by all of our Board directors instructing management to pursue an investment reduction plan and a job reduction plan and a philanthropic giving reduction plan should these eventualities present themselves. And we’re discussing numbers where the reduction, and we’ll go public with it, but I’ll file with you the Board resolution, in the vicinity of a billion dollars of reduced investment over the next 5‑year. The reduced employment is in the zip code of 5,000 jobs over the next 5‑years.
In other words, in a bid to demonstrate that this was not theatre, Entwistle engaged in theatrics by pointing to a resolution from a board of which he is a member that supports his case.
Deja Vu All Over Again: Looking Back at Two Decades of Bell, Telus and Rogers Battles Over the Canadian Wireless Market
In the weeks leading up to the CRTC hearing on wireless services, there was no shortage of corporate lobbying, opinion pieces from telecom company consultants downplaying concerns about the competitiveness of the Canadian wireless market, and comments from company executives threatening to reduce investment if the CRTC mandated new competitions through MVNOs. Those claims have continued this week throughout the hearing.
Independent studies from around the globe have for years (here, here, here, here, here) found that Canadians face some of the highest wireless prices in the developed world. Yet if the usual claims of a fiercely competitive, reasonably priced wireless market provides a sense of deja vu, consider: