No monopoly, no cry!

TELUS, Bell, Rogers, and other large cellphone companies must now share their networks with other competitors.  The Canadian Radio-television and Telecommunications Commission (CRTC) has taken this radical step forward to increase cellphone service competition in Canada.

The CRTC had earlier set an initial policy that allows regional cellphone providers to compete as mobile virtual network operators (MVNOs) across Canada. Under this policy, large cellphone companies must share their networks with competitors. With access to larger networks, regional competitors will be able to offer cellphone services in parts of Canada that they do not currently serve.

The federal government has now set the final rules for this MVNO access. Companies have 90 days to negotiate mobile virtual network access agreements. The CRTC expects that regional competitors will start selling plans in new parts of Canada shortly after these agreements are in place. The CRTC will ensure that deals are reached quickly so that Canadians have more choice of cellphone services.

Is forcing telecom companies to share their networks unfair?

Michel Kelly-Gagnon, President and CEO of the MEI, an independent public policy think tank, does not support the latest government push. He stated: “Canadian consumers would be better served by telecommunications policy based on the market and unfettered competition rather than policy characterized by government interference. Forcing big telecom companies to share their networks with their competitors at regulated rates is counterproductive and risk leading to a slowdown in infrastructure investments, whereas this is the exact opposite of what consumers need.

“Indeed, why on earth would a company constantly invest considerable sums of money in the development and maintenance of its network if any competitor can then seize the benefits of that network under unacceptable conditions unilaterally imposed by government? Would the ant work so hard if it were forced to share the fruits of its labour with the grasshopper?

“But there is also a moral argument to consider: Such a policy is no more nor less than a violation of the principle of respect for private property. No one would ever consider requiring one supermarket chain to rent its space and its shelves to a competing chain or forcing one gym to share its sports equipment with another or mandating that one farm welcome onto its fields a rival farm.”

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