Canada’s telecom ad-hocracy

The Conservatives’ constant meddling with the CRTC shows
a lack of prudent policy development.

James Cowan 0

Weep for the current state of Canadian telecommunications policy. The Conservative government regularly overrules its independent regulator, the courts overrule the government, and Industry Minister Tony Clement announces major policy decisions via Twitter between discussions of the White Stripes’ breakup and updates on his squash game. Whatever napkin the government used to sketch its current strategy for the sector, one gets the feeling there’s still plenty of white space.

Clement promised on Feb. 2 to overturn a Canadian Radio-television and Telecommunications Commission decision that would effectively eliminate Internet companies’ ability to offer unlimited data plans. This would be the fourth time in five years the Conservatives overruled the CRTC, following decisions on local phone service, phone service delivered over the Internet and foreign ownership in the wireless market. Days after Clement signalled he’d intervene once again, a court ruling underlined the problems with this constant meddling. On Feb. 4, the federal court quashed a 2009 cabinet decision overruling the CRTC and permitting Globalive, a company funded with a large dose of Egyptian capital, to provide cellphone service in Canada. The court disagreed with the government’s assertion that the existing Telecommunications Act “ensures access to foreign capital, technology and experience is encouraged.” No such provisions exist in the legislation, the court said, adding, “It is for Parliament not [cabinet] to rewrite the Act.”

Exactly. If the government wants to allow increased foreign ownership, then it should rewrite the outdated legislation. The business community will adapt to new rules. By making decisions in one-off, ad-hoc fashion, the government promotes nothing except instability and uncertainty, which makes it difficult to run a business, frightens potential investors and makes the country seem like a banana republic with a lousy climate.

What is galling is that the Conservatives previously took sizable steps toward addressing these very issues. A report produced three years ago by a government-appointed panel led by Lynton (Red) Wilson said foreign-investment restrictions should be slowly liberalized. In the speech from the throne last March, the government signalled it would pursue these recommendations. But no legislation has been tabled.

There is a difference between prudent policy development and stalling. The Conservatives have proven remarkably risk averse, dragging their feet on a politically sensitive policy. Clement fashions himself the “consumer minister,” overturning troublesome CRTC decisions rather than pursuing systemic change.

In saying that the government stands with “consumers” — rather than citizens or voters or, God forbid, shareholders — Clement diminishes the federal government’s importance, making it nothing more than the complaints desk at the Better Business Bureau. The country has plenty of consumer watchdogs. What it needs is a government offering a clear and comprehensive approach to foreign ownership, to competition, to accessing telecommunications infrastructure and, above all, to the role of the CRTC. And we need that vision articulated in new legislation, so industry doesn’t have to worry every time the government wants to score cheap points. This is the debate we need to have: shareholders, consumers and citizens alike.

James Cowan is deputy editor of Canadian Business magazine.

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