Wednesday, May 4, 2011

The Telecom Oligopoly Are Getting Some Friends

First, a quick history: Telecommunications covers TV, radio and most importantly: the internet. In Canada (thanks to government regulation) a few corporations have risen above all other competitors and have formed an oligopoly.

There are three ways to look at this issue. One, we can take the socialist route. Government has caused this problem where only a few corporations own a large chunk of the market. Therefore, we must run to the government to solve the mess they've created. Regulation fixes all. The CRTC bureaucracy looks out for consumers, unlike those greedy corporate businessmen.

The second viewpoint is a little more rational. Again, government caused this oligopoly to form because of it's bad telecommunication policies. A good option to take here is to relax the laws a bit and reform a good chunk of our telecom industry. This looks like the option the Harper majority is going to take.

The third solution is probably the best one. It's the second option plus an injection of steroids. It's also the topic of this post. If the Tories actually cared about consumers rather than kowtowing to their corporate friends, then they'd follow these guidelines:

CBC: Telecom analyst Mark Goldberg said although the Tories haven't laid out their strategy, the move is to keep the industry competitive.... "Some discussion still needs to be had on how you liberalize the rules in a way that brings the most benefit to consumers," said Goldberg of Toronto-area Mark Goldberg & Associates....

The best strategy is the most radical. End the CRTC, retract the Telecommunications Act, and find some way to deal with the infrastructure. The Telecom Oligopoly own most of the internet's infrastructure, but only through government-granted contracts and massive subsidies. I'm not well-versed in libertarian legal theory nor do I trust Canadian courts. Perhaps any shares “owned by the government” can be sold off to private individuals. In addition, subsequent deregulations can make building internet infrastructure affordable and practical. Especially for those smaller ISP's currently leasing bandwidth from the State protected Telecom Oligopoly.

"It's allowing AT&T, T-Mobile, France Telecom, NTT from Japan — all of these companies from around the world to enter Canada with access to global financial markets, but tying the hands behind the back for people who are among Canada's biggest employers," he said.... It would have to be taken into account how relaxing foreign ownership rules would affect Rogers, Bell and Telus, Goldberg said...

Relaxing foreign ownership rules will help bring competition and reduce prices. However, before we jump for joy it's best to remember who we're dealing with here – The State. Unless complete deregulations create a free market in telecommunications, anything the State does is bound to benefit itself, plus those who lobbied for the preferred treatment. In this case, the Conservatives have no real interest in consumers; they're only objective is easing the limits imposed on foreign corporations. Corporations that, in their home country, have lobbied for similar regulations and government protection.

In the words of DarrylLamb: “This is just corporate nanny statism.”

Industry Minister Tony Clement has already announced consultations on foreign ownership, outlining three options — removing all restrictions; increasing the limit of foreign investment from the current 20 to 49 per cent, and/or lifting restrictions for carriers with less than 10 per cent market share.

Let's hope Tony gets more aggressive than that.

1 comment:

  1. Lot of laughs.. Really tony would get more offended after all these but this is a reality which everyone should face. To hide form reality is not a solution for aything. Great work man (Y)