Bolder action needed on telco competition say industry watchers
Rogers and Shaw applications are pictured on a cellphone in Ottawa on Monday, May 9, 2022.THE CANADIAN PRESS/Sean Kilpatrick
The Canadian Press
Published Friday, May 13, 2022 3:48PM EDT
TORONTO - As the Competition Bureau seeks to block Rogers Communications Inc.'s takeover of Shaw Communications Inc., over concerns the $26-billion deal will reduce wireless competition, some industry watchers say even bolder action is needed to provide more options to Canadian consumers.
Thomas Ross, professor at the UBC Sauder School of Business, says Canada being a big and expensive country to run networks, combined with low population density, means there will always be limits to the telecom options.
He says there are, however, some measures the federal government can take to help spur competition in Canada's telecom industry, like letting foreign wireless companies operate in Canada, whether it's an international company taking over a regional player and growing it or building its own network from scratch.
Ross also says the feds could force Canada's telecom giants to sell wholesale access to their networks at much more favourable prices to facilitate the growth of Mobile Virtual Network Operators (MVNOs), which buy network service from major carriers at a wholesale rate.
However, he notes that these strategies might be hard for the government to fully get on board with, citing a reluctancy to relax foreign ownership restrictions at the moment and the possibility of ultimately disincentivizing Canada's large telecom companies to invest in their networks.
Chatham, Ont.-based independent phone and internet provider TekSavvy Solutions Inc. says that the federal government needs to go a step further and “clean up” the Canadian Radio-television and Telecommunications Commission (CRTC), revamp the competition laws and allow for greater enforcement of these laws.
Peter Nowak, TekSavvy's vice-presdent of insight and engagement, points to the upcoming decision regarding the company's appeal on wholesale internet rates as an opportunity for the feds to demonstrate how they feel about keeping costs down for Canadians.
“It's going to determine whether they are really serious about fostering competition in telecom and lowering prices for consumers, or whether they are just interested in allowing these big companies to keep having their profits,” he said.
TekSavvy is appealing a controversial move made by the CRTC last year to not lower wholesale rates, reversing a decision the regulatory agency made in 2019 to reduce the fees big telcos can charge smaller internet service providers for access to their broadband networks. By the end of May, the Liberal government will decide whether or not they will overturn the CRTC ruling.
Meanwhile, the feds are also being pushed by two consumer advocacy groups to set aside the CRTC's decision in March to allow the transfer of Shaw's broadcast business to Rogers over concerns it would reduce services and competition.
This report by The Canadian Press was first published May 13, 2022.