Phone Deregulation

CBC.ca: Phone deregulation fails consumers

“The report points to a policy decision in December 2006 by then Industry Minister Maxime Bernier that ordered the Canadian Radio-television and Telecommunications Commission to use market forces to the maximum extent possible, and ensure that regulation was minimally intrusive.”

Deregulation is not the issue.  In fact the industry needs to be further deregulated and eliminate the foreign ownership restrictions.  Bell, Rogers and Telus are an oligopoly (like a monopoly but with more than one company).

The are entrenched because they were all started as provincial monopolies and then allowed to merge under ‘deregulation’ without the availablity of third parties to enter the market at the same time.

The smaller players (Fido, Clearnet etc.) never had a chance without a big player with deep pockets (T-Mobile. Verizon, Vodafone etc.) to back an aggressive expansion.

This report points to the failure of ‘market forces’ but this is hardly a free market.  Look at most of the third world – they have cheap mobile phones because their governments don’t waste time regulating the industry to death in a misguided attempt to ‘keep the business in the country’ like Canada does.

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2 Responses to Phone Deregulation

  1. Rob Perri says:

    Sam Walton, the founder of Wal-Mart, once said that “competition is the cure for everything.”
    It is obvious that deregulation in the phone market, along with allowing greater participants to acquire bandwidth has been and will continue to be a boon for Canadian consumers. Just the other day, at 7/11 in Peterborough, I found a deal for a cell phone with one year of airtime for $100. Hek, now even Bell has a one-year pay as you card for $100. Competition is working and will continue to drive down prices and deliver better service while chopping the outrageous profit margins at places like Telus, Rogers and Bell.
    Deregulation would not and does not work in areas of say power generation/transmission because power has inelastic demand and very limited options for substitution (you can’t buy a home fuel cell even with grants that would make it feasible for you to disconnect from the grid- but that time is coming).

  2. ChaseF says:

    My post from CBC.ca:

    This headline is a bit misleading but I agree with the reports conclusions. More foreign competition, less barriers to entry for the little guy, and though its not in the report disbanding the CRTC would be great as well.

    I dont think it is fair to characterize this debate as ‘more regulation vs less regulation’. The issues really at hand are competition, the CRTC and WHAT regulations.

    You can have a library of useless regulations, or you can have a couple effective ones. Its not simply a question of more or less.

    Competition is key though.

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