Richard French arguably had the toughest job at Telemanagement Live.
In a special presentation at the telecommunications industry conference in Toronto this week, the vice-chair of the Canadian Radio-television and Telecommunications Commission (CRTC) discussed the challenges facing the federal regulatory body, and attempted to defend it in the face of criticism from others at the conference.
He assured a somewhat sparse audience that the CRTC favours a competitive marketplace over regulation, but argued that achieving real competition may, paradoxically, require more rules than a regulated monopoly regime.
“It’s different regulation,” French said, “but it implies the same degree of regulatory complexity.”
For instance, he said, if open markets are to lead to competition that benefits consumers, potential new entrants – and those who would invest in them – need to be assured that emerging competitors won’t be trampled by incumbents who can price services based on incremental costs because their existing networks are largely paid for.
French pointed out that the CRTC has already deregulated some 70 per cent of the wireline telecommunications market, and is regulating the wireless market “with a very light touch.”
“We can only justify regulation to the extent that the costs of continuing regulation are less than the cost of deregulating the market prematurely,” he said.
Just before French’s presentation, in a panel discussion that focused largely on regulation, Eamon Hoey, chief executive of Hoey Associates Telecommunications Consulting Services in Toronto, said Canadian telecommunications has slipped badly compared to other countries, with the Organization for Economic Co-operation and Development (OECD) ranking Canada 27th of 30 countries in broadband penetration.
And Iain Grant, telecom consultant and founder of SeaBoard Group in Montreal, said broadband service in Canada is priced higher and offers lower bandwidth than broadband in some other countries.
Hoey suggested in an earlier interview that the CRTC should be abolished.
French acknowledged that regulation is costly and sometimes slow. “We’ve taken a lot of effort to be faster and I think in the future we’ve got to take a little more effort to be simpler and clearer,” he said.
He said one dilemma facing the commission is deciding to what extent it should try to anticipate where developments in the telecommunications industry will lead and act on those expectations, and to what extent it should wait to see what happens before proceeding.
“We haven’t really recovered from the trauma of not realizing what wireless was going to do to the business,” he said, and the same is true of Internet Protocol’s effect on telecom. On the other hand, French said, the pendulum may now have swung too far the other way, toward overestimating the impact of new developments. “For every wireless boom there’s a CLEC bust, and for every Internet there’s a Minitel,” he reminded the audience.
In defending the CRTC, French referred to former vice-chair David Colville, who he said had argued that if some accused the CRTC of doing too much and others said it was doing too little, it was probably doing a pretty good job – a statement French called “Colville’s law of countervailing criticism.”
And he slipped in a few barbs for the commission’s critics. “Some of the public commentators… never seem to have read the Telecommunications Act,” he said. It lays out nine objectives, which govern the CRTC’s activities, and the commission cannot simply “declare victory and walk away.”
However, the current Telecommunications Policy Review, a three-person panel which is reviewing some 100 submissions on the future of telecom policy, could recommend changes to that act and to the role of the CRTC. If that happens, French said, CRTC staff will commit themselves to whatever changes the government makes. “It is absolutely not our purpose to fight a rearguard battle against a decision taken by the government,” he said.
French added – echoing comments Grant made earlier – that government action based on the panel’s recommendations could take some months, given the likelihood of a federal election in the first half of 2006.