CRTC should move towards mandatory telecom licensing, says PIAC report

A new report arguing that deregulation has caused Canadians to be severely overcharged for their wireless and broadband services is being met with industry criticism. On Dec. 30, consumer group the Public Interest Advocacy Centre (PIAC) released a report, Waiting for the dream: The consumer case for telecom reform and results-based regulation, which calls for regulatory reform of Canadian telecommunications companies. The report chronicles the history of telecom regulation in Canada, focusing primarily on the changes that have occurred since the 2006 deregulation of wireline telephony services, known as local forbearance. The move towards local forbearance was meant to lower prices for consumers. But Michael Janigan, PIAC’s executive director and author of the report, said in an interview the decision to deregulate the wireline sector, which was taken under the recommendations of the Telecommunications Policy Review panel (TPR) and then Industry Minister Maxime Bernier, has failed to help consumers because it has no effect on the unregulated wireless and broadband markets. “The current policy direction that was put in place by Bernier four years ago has not had the anticipated results. It has been an impediment on both competition and consumer results and should be rescinded,” he said. Janigan said consumers have not received the type of benefits they had been promised following deregulation, since prices for wireless and broadband services have not dropped. “ haven’t done any reviews of the results to see if is working. Once we deregulated we just kissed the area goodbye, and if the results are negative for consumers there is no way of bringing it back to a place where is can be remedied,” he said. The report recommends mandatory licensing for all telecommunications players, including distributors, retailers and marketers. “Once they’re licensed, they are subjected to a code of conduct and therefore to penalty, which could lead to them losing their licence,” Janigan said. The report also suggests the commission “develop rules and codes of conduct particularly in relation to consumer protection and anti-competitive issues.” But Hank Intven, a communications lawyer at McCarthy Tétrault LLP and a former member of the 2006 TPR panel, said in an interview that pursuing PIAC’s suggested mandatory licensing would be a “very large” regulatory venture for the CRTC. “We would probably have to quadruple the size of the CRTC and have hearings all year long,” he said, adding that he has not read PIAC’s 218-page report in its entirety. “I remember the good old days that the report is talking about when the CRTC would have six-week-long hearings with cross-examination by lawyers that would determine what Bell Canada’s rates would be the following year, and frankly I don’t think that consumers were any better off then than they are now.” Intven added that he is not convinced that returning to regulation and licensing in today’s competitive telecom market is feasible or beneficial to consumers. “It can’t be rolled back. We have an old saying in this industry: you can’t repeal the laws of economics or technology,” he said. “The goal of the report seems to be to suggest that through a regulatory review process there will be a CRTC decision that will lead to better results for consumers than what is happening in the marketplace over the past years, and I don’t buy that.” The PIAC report cites a study conducted in 2010 by the New America Foundation on wireless cost and usage that ranks Canada with the highest average revenue per user of the 11 developed countries surveyed at $67.50 per month. But Michael Hennessy, senior vice-president of regulatory and government affairs at Telus Corp., said in an interview he believes the statistic quoted by PIAC in the report is flawed. “Telus’ in the last quarter was $58.75, and that is about the same across the industry. I don’t know where they got that extra $10 from,” said Hennessy. “There has been a constant decline in wireless voice pricing over the past four or five years, and most reports would signal that Canada has the lowest home phone rates in the world.” Intven said it’s not easy to draw simplistic conclusions from these types of studies. “The rates are difficult to assess because there are so many ways for measuring baskets and services. There is room for improvement in Canada, but I don’t think that regulation is the way to do it,” he said. asmith@thewirereport.ca

CRTC should move towards mandatory telecom licensing, says PIAC report

News | January 5, 2011

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