On Competition and the Canadian Wireless Market
In the Financial Post (23 July 2009), two commentaries from opposing sides of the expansion of the wireless market wrote about what they thought was wrong with the recent auction of new spectrum and the regulatory processes.
While they both have some valid points, they both miss (or choose to ignore) the real problem. The lack of competition in the market solely due to protectionism. While Michael Hennessey of TELUS raises concerns about whether GlobalLive is “Canadian-owned” due to foreign investment, he also tries to argue that GlobalLive didn’t need “protection” from the incumbents due to the deep pockets of the foreign owners…
The true solution to high wireless fees and poor service for Canadians is to open up the market to larger foreign firms. What is the economic logic of forcing Canadians to pay higher prices just to ensure “Canadian-ownership” of the network? In many other sectors of the economy (cars, paper, mining, oil, insurance) we fully allow foreign companies to operate in this country. We even have foreign banks (albeit on a small scale thus far).
So I call on the Government of Canada to order the CRTC to allow foreign ownership in the market, and tell the newcomers in the market to offer themselves and their spectrum up for investment. If you’ve spent significant time outside Canada you would know that wireless service from Orange, Vodafone, T-Mobile or DoCoMo should be welcomed in this country.