OPINION: More competition does not require new competitors

By: Rizwan Jamal, CEO of Beanfield Technologies Inc. Since the Canadian telecommunications industry was deregulated in the 1990s, our regulatory bodies have struggled in their quest to ensure a fair playing field between the dominant telco and cable incumbents, smaller co-op and municipally owned telcos, and newer entrants, like Beanfield, TekSavvy, or Xplore. This isn’t a knock. After decades of monopoly it only makes sense that creating appropriate policy and enforcement would take time. That being said, 30 years on, with poor results and some of the highest prices in the world, we seem to keep revisiting the same issues: aggregated versus disaggregated, temporary or permanent wholesale high-speed access (HSA), service- versus facilities-based operators. While these are important and deserve reconsideration as time and technologies progress, we think that part of the solution to ensure a fair playing field lies elsewhere: namely, enforcement. The CRTC regularly takes years to make decisions that should take months. That lag, inevitably, favours and is used by deep-pocketed incumbents to ensure their dominance continues. There seems to be no appreciation that the time between launching a grievance with a regulator and receiving a decision can mean life or death for small or mid-size competitors and significantly affect their ability to make an impact -- both in terms of creating a competitor large enough to truly challenge others and, ultimately, to lower prices. It’s one of the worst kinds of irony that Canadians served by incumbents, through their sky-high service fees, are paying the very legal costs that ensure they remain captive and broke. As the pace of change continues to accelerate, this disparity only grows and is a large reason why there are few vibrant, well-capitalized, fibre-only, facilities-based operators who have the means to effectively challenge the incumbents with innovative product and service offerings. If you told most Canadians that besides the incumbents there are almost 300 telecom operators across the country, I don’t think it’s an exaggeration to say that you would be met with shock and surprise. “Where are they?”, “How long have they been around?”, and “Why haven’t they grown?” are the obvious and fair questions they would ask. This lack of awareness isn’t the result of poor marketing or a lack of expertise from non-incumbents -- far from it. Instead, it’s the result of a playing field so slanted that growing into a larger force that can change the market is almost impossible. Using Beanfield as an example, there is no doubt that our presence has an immediate and positive impact on the competitive landscape. Since we launched our residential product almost ten years ago, we estimate that our presence has collectively saved consumers in our footprint tens of millions in after-tax dollars and cut in half the average cost paid -- all while providing a world-leading experience. All one has to do is look at a building we service, and then look across the street (literally), at a building we don’t. The difference in price paid by residents in a Beanfield-connected building versus their neighbours will be stark and shocking. The most important part is that this isn’t just the price paid by our customers -- it’s the price paid by everyone in the building we service regardless of their supplier. It’s competition working the way it’s supposed to because there is an alternative to the incumbents -- forcing them to compete with our offer or lose business. From a commercial perspective, many of Canada’s financial institutions, hyperscalers who are leading the way to cloud and artificial intelligence, as well as organizations that have extremely high standards for reliability, such as the Toronto Police Services and Porter Airlines, choose Beanfield as their provider in Toronto, Montreal, and Vancouver. I’m not highlighting this as a sales pitch, but as evidence that a large market exists and will support alternatives to the incumbents. The problem is that the regulatory environment hamstrings the companies that could grow into this kind of alternative at every turn and impedes us from growing further. Most recently, in its review of the wholesale HSA framework, the CRTC made the bewildering decision to allow incumbents to buy access on each other’s networks and sell their services as long as it’s not in their “traditional” territory. Their reasoning was that Telus being able to sell internet services in Ontario using the Bell network, for example, was creating more competition. So, an incumbent company, that already has a nationally recognized brand because of its wireless services, is now considered a “new entrant” in home internet because it can piggyback on another incumbent's network. Call me crazy, but an incumbent paying an incumbent to make both incumbents money-- all while not expanding or improving a network -- doesn’t much sound like creating a sustainable long-term competitive environment. Thankfully, the Canadian Network Operators of Canada (CNOC), Teksavvy, Cogeco, Eastlink, and even Bell among others (including Beanfield), have asked the CRTC to revisit this aspect of the decision alongside direction from ISED and Minister François-Philippe Champagne to do likewise. While revisiting this decision and, hopefully, reversing it, is the right thing to do, the fact that it was made in the first place is indicative of the lens through which our regulatory bodies view competition and might be why we don’t have more of it. Canada has so many existing skilled, talented, and hungry telcos that just want a shot. Helping them scale by ensuring a fair regulatory environment that doesn’t penalize their size, addresses and enforces grievances quickly, acknowledges their vital place in local communities, and supports their growth through targeted investments will give Canadians the competition and lower prices they’ve been begging for and deserve. Rizwan Jamal is the CEO of Beanfield Technologies Inc. Prior to Beanfield, Jamal was the CEO of Xplore. He also worked at Bell for more than 12 years, where he served as president of residential and small business services, and spent 11 years at Telus in various roles, including as senior vice president of consumer marketing. The Wire Report welcomes submissions of opinion pieces from outside contributors who are knowledgeable on the subject matter discussed. For more information on what should be included with opinion piece submissions, click here: hilltimes.com/submit-an-article. Submissions can be sent to editor Hannah Daley at hdaley@thewirereport.ca. To see previous opinion piece submissions, click here: thewirereport.ca/tag/opinion/.

OPINION: More competition does not require new competitors

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| January 8, 2025

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