Terence Corcoran: Rogers trapped within the jungle of bureaucrats

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Some day whenever you’re outdated and gray the Canadian regulatory jungle could have wilted away, changed by an open and free market financial system that isn’t burdened by interventionist businesses, meddling politicians and conniving company sorts scheming for favours. Don’t maintain your breath, however that dream has emerged out of recent developments in two industries — telecom and airways — which can be basic made-in-Canada regulatory quagmires.

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The story with the best information worth is the $26-billion Rogers-Shaw merger, a big however removed from colossal company deal that’s now slowed down within the regulatory jungle populated by wild political animals and large rule-sniffing bureaucrats out for a recent kill. The deal acquired the blessing of the CRTC again in March, however solely after extracting wads of money from the businesses. Now the Competitors Bureau, oxymoronic guardian of regulated competitors, is shifting in to block the deal in an effort to “shield Canadians from larger costs, poorer service high quality and fewer decisions, significantly in wi-fi providers.”

A far much less essential story, in greenback phrases at the very least, is the little wrestle between Aptitude Airways, a reduction service primarily based in Edmonton that’s underneath overview by sniffing bureaucrats inside the Canadian Transportation Company. Is Aptitude contaminated by harmful forces, recognized in Canada as “international homeowners”? Based on the CTA, Aptitude must show that its licences are “owned and managed ‘actually’ by Canadians. The Company makes use of enterprise and different data to find out whether or not a licence holder or applicant is ‘actually’ Canadian.”

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What hyperlinks these two tales, actually, is the function regulators and politicians play in distorting competitors and interfering with market dynamics. Overseas possession guidelines exist in each the telecom and airline sectors, the explanations now completely misplaced within the lengthy historical past of petty nationalist protectionism that has been a characteristic of Canada’s regulatory jungle for many years. Who actually cares concerning the possession of the airline that flies passengers throughout Canada and all over the world? The telecom trade is topic to related international possession restrictions, as if clients would object if their wi-fi service have been supplied by Verizon or T-Cellular.

The argument has been made that if Canada opened its wi-fi market to competitors from international firms, shoppers wouldn’t be dealing with the excessive costs they now allegedly pay for cellphones. An OECD research just a few years in the past claimed that “Canada has restrictive international possession guidelines in telecoms and broadcasting that are supposed to assist Canadian cultural targets however which additionally cut back aggressive pressures.” The OECD concluded that “Better competitors in telecoms and broadcasting might decrease costs and improve entry to quick, high-quality networks.”

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The competitors paperwork, nonetheless, has no mandate to look into the international possession guidelines as a deterrent to competitors. As an alternative, it would spend months making an attempt to show that the merger of Rogers and Shaw, and the destiny of Shaw’s Freedom Cellular wi-fi providers, should be suspended whereas the authorized bureaucrats try and develop their case to show earlier than the federal Competitors Tribunal that the merger is “more likely to lead to a considerable lessening or prevention of competitors in any market in Canada.”

The context for all this fretting and digging and snorting round is the favored conception, fostered by activist teams, unions and authorities interventionists, that Canadians are paying among the highest cellphone costs on the earth. The bureau, armed with investigative powers, has accomplished little to discourage the high-cost theme — regardless that there may be purpose to consider that the good Canadian cellphone value gouge could also be principally jungle fantasy.

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Help for the concept Canada is a bastion of excessive cellphone prices is generally the product of superficial worldwide rankings of wi-fi costs. One of many many sources of the high-price declare has been Rewheel, a Helsinki-based telecom analyst. “Costs within the Canadian wi-fi market … proceed to be the best or among the many highest on the earth,” Rewheel reported final October in its newest worldwide comparability of cellular information charges.

Rewheel’s analysis strategies, nonetheless, have been trashed by researchers. A 2019 paper revealed by a world regulation journal stated Rewheel’s “analyses offered in its report are basically flawed. Furthermore, Rewheel’s conclusions concerning three vs. 4 service international locations usually are not solely baseless … The Rewheel research is, in impact, the epitome of a flawed research … It focuses on an artificially constructed measure that doesn’t symbolize real-world traits of competitors.”

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One other paper from NERA Financial Consulting in Washington took a have a look at Rewheel and different worldwide value comparisons and located nothing however flawed strategies, together with a report from the OECD that ranked Canada as a poor performer. “The rankings primarily based on the OECD information undergo from the identical flaws” because the Rewheel and different stories.

The NERA research was funded by the U.S. telecom trade, however I can discover no critical critique of its rationale and strategies — which is to take a look at the general worth delivered by wi-fi suppliers in key international locations all over the world. Canada ranks on the prime amongst G7 international locations with decrease costs than different members. Amongst 20 OECD international locations, Canada is second in offering value and worth to cell phone customers.

If the NERA evaluation is true, then the Canada cell phone value claims are a monster fantasy. It’s as much as trade critics to show NERA mistaken. In any other case, get the Competitors Bureau out of the jungle.

• E-mail: tcorcoran@postmedia.com | Twitter: terencecorcoran