Industry Regulation and Competition Policy - Op Eds

Today the Standing Committee on Industry, Science and Technology begins to dig into the telecoms matter of the day. It would be useful for them to know that cellular service prices have fallen 25 percent over the past five years, a decline that aligns with Ottawa’s promised wireless rate cut. This is important and surprising news for both Canadian consumers and the government.

The Prime Minister’s 2019 Mandate Letter to the Minister of Innovation, Science and Industry provided express political direction to reducing the average cost of cellphone services and expand mobile virtual network operators (MVNO) in the market. It directed the minister to:

“Use all available instruments … to reduce the average cost of cellular…

Policy decisions coming soon from the CRTC, the federal telecommunications regulator, are going to shape major investment decisions with critical impacts on our economy. Canadian governments need to get the right balance between investment and sustainable competition. Failure to do so will jeopardize efforts to get Canadian communities digitally connected and hence our ability as a nation to participate in an increasingly digital world economy.

The next generation of technology investment — “5G” — is critical to the economy’s future. For example, it will be key to commercializing innovations in precision agriculture. It will enable rural economic development, such as automated hauling at mine sites, and underpin further…

ll est grand temps que nos entreprises accélèrent leur numérisation. Celles qui ne mordront pas la carotte des appuis offerts par les gouvernements et les institutions financières goûteront au bâton des concurrents qui redoublent d’ardeur.

La COVID-19 agit en accélérateur de changement, que l’on pense seulement au télétravail et aux achats en ligne qui ont grimpé en flèche. Or, ce ne sont que deux manifestations parmi plusieurs de la numérisation de l’économie, un concept large qui englobe aussi la bande passante à haut débit qui livre les séries de Netflix ou l’accès internet aux services bancaires, par fibre optique ou par les ondes de nos téléphones.

Dans les entreprises innovatrices, l’information numérisée lubrifie…

As restrictions continue on in-person dining, COVID-19 has made restaurants increasingly dependent on food delivery platforms. Last month, the City of Toronto asked Ontario to temporarily cap the service fees restaurants are charged, which can be as high as 30 per cent of the bill.

There is superficial appeal to price caps, but taking economic guidance from Hippocrates – first, do no harm – they amount to quackery. Regulatory interventions need to be carefully dosed according to a precise diagnosis of market failure and the extent of the disease.

Instead of introducing new price cap regulations, Premier Doug Ford urged food delivery apps to slash commissions as a way to help out pandemic-stricken restaurants. This moral…

In Canada, if regulation doesn’t work, the answer always seems to be more regulation. And so it is now with wholesale internet rates.

In August, the Cabinet (mildly) criticized the CRTC’s new wholesale internet rates, noting that because they are so low, they may “undermine investment in high-quality networks.” This sentiment is justified, but the Cabinet needs to go much further. This is an opportunity for Canada to finally accept that our government-directed internet “market” is not working — and to create a system of real, authentic competition.

First, why is the CRTC setting internet rates anyway? Canada has a form of wholesale internet regulation that is unique in the world. In Canada, as in most countries,…