Fraser Institute on the Wireless Debates

Blog, Disruption, Frontier Centre

The Fraser Institute has come out in favour of dropping the remaining foreign ownership restrictions in the telecom industry as the way to solve our current policy issues in the wireless sector.

Reducing and eventually eliminating the foreign ownership restrictions is the right way to go but it is only part of the process and it needs to be done carefully. Dropping foreign ownership restrictions without altering the rules of the market would not ensure more dynamic competition. Indeed, that action could make concentration of ownership and lack of competition even worse. Consider for example if a foreign company (say Verizon) decided to purchase the wireless assets of Rogers, Bell and Telus. Where would that leave competition in Canada? The Competition Bureau would probably come into play in this scenario but nevertheless the example illustrates the point.

The report it also fails to recognize that spectrum allocation is a legitimate government function that automatically affects the competitive environment one way or another. There is a role for spectrum caps to ensure competition in the market and that a dynamic market exists for spectrum auctions. The problem with the current policy is that it only applies to new auctions. To be truly effective, spectrum caps should also consider the impact of past spectrum give away allocations to incumbents.

Canada should get something back from other countries in exchange for our liberalization in international goods and services trade negotiations.

Finally, Canadians suffer from brand illusion through spillover advertising. As Ian Grant points out in the story in the above link, Vimpelcom, part-owner of Wind, is bigger than Verizon. What does that say about how the rules should be structured?  Why isn’t the CWTA advertising campaign targeting them instead of Verizon?