Babies and competition in telecoms

Competition in telecoms is like babies: they don’t happen by themselves. And do not arrive by magic (or by a stork) on your porch.

The Trudeau government has been saying for years that it wants to lower the prices of your wireless phone plan and your internet plan at home, among the most expensive in the G7.

The best way to lower prices: to increase competition within this oligopoly dominated by Big 3 (Bell, Telus, Rogers). If prices are lower in Quebec, it’s not because of our good looks, but because of the presence of a fourth player, Videotron.

For the past week, the Trudeau government has been proposing to modernize the regulatory framework so that the Canadian Radio-television and Telecommunications Commission (CRTC) promotes greater competition in telecoms. Translation: the federal government has chosen its side, that of increased competition and lower prices for consumers.

It is very good. One cannot be against virtue.

Except that at the same time, the Trudeau government has just confirmed the leg it made in 2020 to independent internet service providers. In 2019, the Canadian Radio-television and Telecommunications Commission (CRTC) decided to significantly reduce the rates paid by independent providers in the Big 3 and Videotron to use their networks. We are talking about substantial reductions, up to 75% (for example, the access rate for the Videotron network would have been $14.30 rather than $53.15 per month per user).

But the Big 3 and Vidéotron protested to the Trudeau government, which complied and strongly suggested (translation: forced) the CRTC to return to the principles of the old, much higher tariffs. What the CRTC did in a new decision in 2021. Result: the costs of independent providers for network access have increased (compared to the 2019 decision). This prompted the largest independent supplier in Quebec, Ebox, to throw in the towel by selling itself to Bell. Not enough to increase competition…

To increase competition in wireless telephony, the CRTC will soon force the owners of wireless networks (the Big 3 and Videotron) to lease their networks, but only to competitors who also have wireless networks. It won’t bring in as many new players as possible, but it will no doubt allow a regional player (eg Videotron in Quebec) to offer services across the country. And, if we dream a little, to create the fourth national player so expected for decades.

Sooner or later, if we want to reduce telecom prices, Ottawa will have to make decisions that will displease the Big 3. And don’t back down when it starts to heat up.

The federal government will soon have the opportunity to show whether its new regulatory philosophy is just empty words. Two important files are on his ministers’ desk: the sale of Shaw and the choice of the next CRTC commissioner.

To allow the sale of Shaw to Rogers, the latter must divest itself of the wireless services of Shaw (Freedom Mobile), a major regional player in the West. Everyone, even the bride and groom, agrees. However, we have the unpleasant impression that Rogers is trying to pass Freedom Mobile on to the less experienced buyer, hoping that he will break his teeth. However, Quebecor would be the ideal suitor to increase competition. The Trudeau government, which will have the final say on the transaction, must ensure that it truly serves the interests of consumers.

Ottawa must also appoint a new president to the CRTC this summer. Who will be bilingual, but not necessarily a francophone, says Minister Pablo Rodriguez.

A friendly reminder to the Trudeau government, which sometimes gets its feet wet when it comes to bilingualism: since its creation in 1968, the CRTC has always alternated in practice between a French-speaking president and an English-speaking president. This time, it’s the turn of a francophone.

We must therefore hope for the appointment of a French-speaking president… who will not be afraid of Big 3.