It was disappointing to see the Liberal Party's response to the government's latest wireless telecom policy. That the Conservatives seem to have failed to please anyone with their revised strategy is no surprise. Under Tony Clement's direction, the last expansion proved to be a comedy of errors resulting in a litany of court challenges that remain unresolved 3 years later. It created fertile ground for several new wireless carriers to sprout up but none of them have achieved sustainability and it remains only a matter of time until they are forced to sell-out, merge or otherwise fail. Tony's objective - a populist "cheaper cell phones" policy has been partially achieved for a small number of urban Canadians at the risk of long-term damage to the industry.
Now, the Conservatives propose to attract more investment in the system by allowing foreign corporations to buy up to 100% of Canadian telecom carriers - but only those new and small and carriers that have an uncertain future. How is that supposed to attract investors? And do Canadians really want to sell their airwaves to foreigners?
Compounding the problem, the Conservatives chose to limit the amount of spectrum any carrier, new or old, can own. By limiting the amount of spectrum the new and smaller carriers can acquire, according to the leader amongst the new-comers from the last expansion, Tony Lacavera of Wind Mobile, the Conservatives are making it impossible for the small carriers to offer the data-intensive high-speed service Canadians want and denying them the opportunity to grow their business to profitability. Worse, the large and long-established carriers won't be able to get the spectrum they need to serve all Canadians, urban and rural, without buying-out or merging with some of the smaller or newer providers. As a result of the Conservatives' duplicitous policy, the established carriers are being denied access to foreign investment that might speed up the deployment of the next generation of high speed wireless outside half a dozen major urban centres.
While Liberals claim the Conservatives' policy won't encourage competition, the real problem is that Canada already has too much competition and too many carriers. The industry is fragmented to the point future service is jeopardized. Compared to our neighbour, the USA, with three major carriers serving a population 10 times the size and concentrated in a much smaller geographic area, Canada now has more than 9 carriers, not including wholly owned subsidiaries (think Bell/Virgin, Telus/Koodo, Rogers/Fido/Chatr) chasing a relatively tiny market spread over an absolutely huge area, where everyone expects the same the level of service for the same price, whether at King and Bay in Toronto or 500 km north of Prince Albert. It just doesn't work.
Promising cheaper cell phones may be a nice populist notion, but it's bad policy and shame on the Liberal for jumping on the bandwagon. Liberals should insist upon an unrestricted auction of the publicly owned airwaves; an auction that could bring in more revenue for the federal government to offset the national debt. Small, unviable and unsustainable carriers would be swallowed-up by profitable competitors who, free from aggressive price -cutting, would have the revenue to deploy the best technology across the nation.
Instead of the phony competition we have now, two or three companies with long-term viability could really fight it out for our business. The result would be better service nationally and realistic prices.
