Telecom Policy Review: CATA members call for incentives

In light of this week’s Telecom Policy Review Consultation Forum in Ottawa, the Canadian Advanced Technology Alliance is urging the federal government to allow greater competition in the marketplace to increase adoption rates of information and communications technologies in the Canadian market.

According to a recent online poll of CATA members, the majority of respondents felt there is a direct link between ICT investment and improved productivity.

“Just as businesses rework their structures and methodologies to be more successful and competitive, governments must rethink and rework their public policy approaches so that we can propel the whole country forward in terms of how productive we are and how successful we are,” said CATA Alliance president John Reid in an interview Wednesday.

Productivity as it relates to the ICT sector is one of the main subjects of BCE’s submissions to the government’s Telecom Policy Review. Lawson Hunter, executive vice-president and chief corporate officer, BCE, was in Ottawa on Wednesday

“The ICT sector is in desperate need of a national strategy,” said Hunter. “It is the key driver of overall productivity in the economy that we’re seriously lagging the U.S. and Europe on productivity. It’s basically time to do something about it.”

In its submissions to the panel, which was appointed by Industry Minister David Emerson in April and is comprised of three members, BCE made proposals on financial incentives for small and medium-sized businesses to purchase capital and to acquire training on new machinery and equipment.

Likewise, CATA Alliance also recommended to the government to provide better tax credits to encourage industry growth. With ICT investments accounting for the majority of its capital spend, Markham, Ont.-based Fox Group would welcome such incentives, said Roberta Fox, an analyst with the firm.

“ICT for Fox Group is our second-highest expense,” said Fox, a CATA Alliance member who participated in the survey. “We spend more on ICT per head count than they did when I was at Deloitte and HP.”

BCE’s Hunter said while providing the financial means for SMEs to purchase new technology is important, training employees is paramount when it comes to increasing productivity.

“It’s not simply a question of buying more computers and buying more equipment,” said Hunter. “If you don’t know how to get the best use out of it then you’re never going to get the productivity gains.”

Respondents also expressed a desire for the government to increase its spending on the “last mile” of service delivery to remote parts of the country. “The more that can be done to create that massive high speed network, the better,” said Reid. “It really is part of the new Canada that we need to drive towards.”

Fox, who is relocating her business to a farm northeast of Toronto in Mt. Albert, at the end of November, said the town of East Gwillimbury has better telecom than Markham – one of the tech capitals of Canada.

“I’ve got five-bar cellular and five megs of DSL on 3.5 acre farm,” said Fox. “East Gwillimbury decided it wanted to use the availability of broadband as a benefit for having professionals move up there.”

Another top issue on the minds of respondents was the issue of modernizing the current regulatory regimen to provide less regulation or a deregulated environment to allow for greater competition and, ultimately, more choice for the consumer.

“We’ve encouraged contentious issues or tariff issues to be mediated or resolved outside of the CRTC,” said Reid. “There needs to be less confrontational mechanisms to encourage conflict resolution.”

Similarly, Hunter said the federal body that regulates the telecom industry isn’t equipped to deal with today’s market conditions and rapid technological changes.

“The existing legislation is rooted in an old natural monopoly utility model of the sector which just no longer is true,” said Hunter. “As a result of that we are stuck in a much too intrusive regulatory environment. We need to much more quickly be moving to reliance on market forces and competition and also should see more reliance on the Competition Act and less need reliance on sector specific regulation.”

While both Reid and Hunter agree the government needs to loosen its reigns on competition, they agree the CRTC is still needed for other issues such as e911 services.

“Obviously there has to be some oversight,” said Reid. “That’s a legitimate role for government to play. Any time you have an intervention, you have to do so in such a way where it doesn’t impede progress.”

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