I begin with a quote that I included in my last post - "don't mistake activity for achievement" - from the late great UCLA Basketball Coach and teacher, John Wooden. That's what came to mind again, among a few other things, when I read an interview in La Presse* with the Chair of the Canadian Radio-television and Telecommunications Commission (CRTC) earlier this week. I have met the Chair on a few occasions in her various roles over the years, and she is an affable and accomplished public servant and lawyer.
However, upon reading the interview in La Presse, I feel compelled to respond to a few of the things Chair Eatrides is reported to have said. I normally pay little attention to these kinds of pieces, but this was somewhat different than the usual boiler plate interview introducing the Chair, the CRTC and what it does to the populace.
We learn that in the Chair's first 497 days (which seems an odd way of calculating how long you have been in a job, rather than how many days you have until retirement), but to resolve that, for me at least, let's call it 1 1/2 years. The article indicates that in the first 1 1/2 years the Chair has come to a mixed assessment of the results. We learn, and this is repeated elsewhere in the article, that the CRTC issues 400 decisions each year and in the Chair's tenure thus far, has initiated 13 public consultations on a variety of matters. Put another way, there has been lots of activity.
The Chair's mixed assessment it seems, comes from what she claims are implementing measures that have strengthened competition in wireless (the good) and the sale of some independent internet service providers (ISPs) to other bigger, integrated providers (apparently, the not so good). The Chair suggests that these sales or closures are not the result they would have hoped to see. She hopes that opening the fibre investments made by the established carriers will inject plasma into the veins of bleeding ISPs on an interim basis will be the cure for these competition concerns.
A couple of things to unpack here. Will putting the defibrillator on the chest of the ISPs result from mandating fibre unbundling? Putting aside whether to unbundle fibre at all (Breaking: they shouldn't have), how will enabling another wholesale service tier for ISPs create some magical jet fuel for ISPs prospects? I feel strongly that it won't, based on the history of broadband wholesale over the last two or more decades. Adding another service tier won't incentivize them to invest in their own facilities and wean themselves off reliance on the established carriers who have invested, however much they say it will. The theory trotted out is called the stepping stone theory and it has never happened in any appreciable way for the last 30 years. Let it go please.
On the issue of whether the disappearance of some some small ISPs is good, bad or indifferent, let's talk a little about history. Do names like London Telecom, Groupe Telecom, Sprint Canada, fONOROLA, Metronet, now Distributel, eBOX, Clearnet, Microcell, Public Mobile, Mobilicity and a host of others ring a bell? These were all wholesale-based competitors who sold to other competitors, often larger established players. Why did this occur you may ask? Largely it happened because the CRTC put in place the conditions for it to happen. The CRTC created an opportunity for entrepreneurs to enter on favourable terms and leverage the networks of the established players. The investors in these companies should not be pitied; they should be applauded because most if not all of them had an entry and exit strategy. They built up their customer bases and usually exited at the appropriate time for lucrative multiples of what had been invested. So, the CRTC created an arbitrage opportunity and these savvy entrepreneurs took advantage. They should be applauded and not pitied because most of them were handsomely rewarded upon acquisition.
So, these measures now being touted by the CRTC as remedial are simply a rehash of the same policy they have been following and the Government encouraging. It would seem none of them are one time learners, or two or three time learners at that. I recall an interview with Vice Chair, Telecom David Colville in the mid 1990's who when asked "what the CRTC would do to save struggling resellers?", responded, "we created the opportunity for entry, we did not guarantee the resellers' success". Among other wonderful qualities, Mr. Colville was a very astute and wise person.
Ms. Eatrides did not list as an accomplishment the decision of the CRTC to allow the incumbent carriers (the biggest ones) to resell each others' fibre, at least on an interim basis. She did indicate the decision would be forthcoming in the coming months. In the final decision, with the greatest of respect, I would encourage them not to do so. It could have the effect of curtailing the network expansion and investments among the proven workhouses of an otherwise robust policy and worse, prove devastating to those new entrants plucky enough to give wholesale entry a go, particularly the truly independent ones and also worrisome the smaller facilities-based carriers like Cogeco et al. attempting to expand their reach.
With respect to the wireless progress report, either Ms. Eatrides is confused or more likely the reporter is. The article seems to suggest that there is some causality between finalizing the mobile virtual network access (MVNO) rules in May and Statistics Canada reporting that wireless prices have fallen 39% between January 2021 and April 2024. Obviously, finalizing MVNO rules in May of 2024 had next to nothing and quite frankly, nothing to do with market price decreases between January 2021 and April 2024. I mean who writes or says this stuff? If the market has delivered 39% in price decreases without MVNOs, it begs the question why are they enabling MVNOs at all. This is one of the mysteries of life that only the CRTC can answer. You can find more on this from my friend Mark Goldberg at Telecom Trends and a discussion of this by me in previous posts.
On the bedevilling issue of setting rates that would increase competition and not impact investment, the Chair was more taciturn. The article indicates that Ms. Eatrides believes it is possible to serve both of these ends. I wish her well in that quest because it has eluded the CRTC for 30 or more years, but the CRTC is sometimes like the little train that thinks it can. Bonne Chance!
So with having launched 13 consultations in the last 497 days I suggest that people remember the admonition of John Wooden, "don't mistake activity for achievement".
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