Liberals clarify new telecom policy to reflect importance of investments

The new wording could be more favourable to the large telecom providers than the more vague reference to a “potential” to exercise market power that was in the original draft. (Pexels Photo)

OTTAWA — The final version of a new Liberal telecommunications policy, in effect as of Tuesday, takes steps to address industry concerns while maintaining a more consumer-oriented direction than the 2006 policy it replaces.

The new policy directive to the Canadian Radio-television and Telecommunications Commission still emphasizes the need for affordable access to wireless, internet and other telecom services throughout the country.

However, the government has also amended its first policy priority, saying the CRTC should encourage “all forms of competition and investment.”

The draft version, announced in February by Innovation Minister Navdeep Bains, didn’t mention investment until the seventh of seven priorities to be considered in all future telecommunications decisions.

The original proposal was criticized by Canada’s main national and regional network companies, which said they needed assurances that it would be worth the risk of investing further billions on their infrastructure.

Bains said in an interview Tuesday that he recognizes the telecom companies have made significant investments — about $12 billion in recent years — and Canada has some of the world’s best-quality networks as a result.

“But we need to also promote competition so we can (have) more affordable prices for cellphones and the internet. And that’s what the directive speaks to,” Bains said.

“It’s really about putting the consumer front-and-centre, so the investments being made will benefit consumers as well.”

Among other things, the final Liberal policy directive says the CRTC should “foster affordability and lower prices, particularly when telecommunications service providers exercise market power.”

The term “market power” generally refers to a dominant company’s ability to set prices.

The new wording could be more favourable to the large telecom providers than the more vague reference to a “potential” to exercise market power that was in the original draft.

But the final policy directive continues to put stronger emphasis on consumer rights, and conditions for allowing new competitors, than the 2006 policy put in place under the Harper Conservative government.

Laura Tribe, executive director of the OpenMedia consumer advocacy group, welcomed the finalized policy direction.

“This clearly tells the CRTC it’s time to put people before Big Telecom,” Tribe said in a statement.

“At this point, all eyes turn to the CRTC to see if and how it follows through to make the government’s clear vision for affordable connectivity for all throughout Canada a reality.”

One of the contentious issues to be considered by the regulator is whether to change its stance on mobile virtual network operators, or MVNOs, which facilities-based networks generally oppose.

Rogers, Bell and Telus own Canada’s three main national facilities-based networks while Shaw’s Freedom Mobile, Quebecor’s Videotron and Bragg Communication’s Eastlink have regional networks.

The CRTC said in March, shortly after Bains announced the policy shift, that it was of the “preliminary view” that there should be more opportunity for MVNOs.

Supporters of MVNOs — which pay for wholesale access to wireless networks where they haven’t installed their own facilities — argue that consumer prices will fall if the large carriers face more competition.

Critics of MVNOs — particularly carriers that would be required to sell wholesale access to their networks at a regulated price — argue that the practice would dry up future investments and hurt Canada’s competitiveness in telecommunications.

CRTC chairman Ian Scott said in a statement that the regulator had taken note of the final text of the government’s policy direction.

He added that “this policy direction will be applied to current and future telecommunications proceedings, including the review of mobile wireless services and other proceedings where final submissions have not yet been made.”