THE LITANY OF REGULATORY issues facing the Canadian telecom business is long and the stakes are huge. It’s why this year’s Regulatory Blockbuster session held Wednesday at the Canadian Telecom Summit yet again delivered a lively, sometimes heated, discourse among the industry’s key regulatory players.
Moderated by Cartt.ca’s editor and publisher Greg O’Brien, the panel featured senior regulatory experts from Bell Canada, Rogers Communications, Telus, MTS Allstream, Globalive Communications and PIAC (the Public Interest Advocacy Centre) and the issues ranged vertical integration, foreign ownership, usage-based billing, wireless spectrum auction rules, rural broadband initiatives, and so on.
With the CRTC’s public hearing on vertical integration slated to begin June 20, it was a top-of-mind issue for members of the panel.
Mirko Bibic, Bell Canada’s senior vice-president of regulatory and government affairs, advocated a proceeding that would result in limited new regs that would allow market forces to drive competition. He accused some of his competitors (especially Telus, which wants safeguards against the big vertically integrated companies holding back exclusive content) of turning into “regulatory robots” who want to “regulate, regulate some more and then over regulate.”
When asked to address concerns about content exclusivity on platforms such as Bell Mobile TV, Bibic said: “There are so many choices available to the consumer for how they want to watch TV shows, so the fact that content may be available on only one wireless provider has no impact on the consumer’s access to content.”
He added that Bell Canada is more than willing to sell its content to those wireless competitors, such as Telus, who “made a conscious decision not to invest in media assets, period.”
When Bibic characterized current content offers on the table as “more than reasonable”, Telus senior vice-president of regulatory and government affairs Michael Hennessy quipped sarcastically: “The offer on the table…is a lot more than ‘reasonable’.”
Drawn into the discussion surrounding vertical integration regulation, Ken Engelhart, Rogers Communications senior vice-president, regulatory and chief privacy officer, said: “I have a sense of dread when Bell says, ‘We don’t want any rules, but we’re here to negotiate.’”
Engelhart suggested one simple rule Rogers has put forward which would be that any licensed, regulated television content should be made available to all platforms and all providers. He qualified his point by saying online content distributors should be affiliated with a licensed broadcaster (i.e. a company that pays into the broadcast licensing system).
Chris Peirce, chief corporate officer for MTS Allstream, said: “I have a real problem with Mirko’s position that ‘We made a choice to acquire content and you didn’t, so tough.’” Peirce said MTS Allstream’s approach is one of providing “diversity of choice for consumers”. To that end, the Winnipeg-based provincial telco and wireless provider (which also provides digital TV service in Manitoba and national connectivity through Allstream) is calling for industry regulation that will guard against anti-competitive behaviour in the vertically integrated media market.
“We have a broadcast policy system that was not crafted around competition. It was crafted around different goals, Canadian content, that sort of thing,” Peirce said. “But now we’ve got a system where clearly competition is becoming a key element within the broadcasting industry as well. So it’s important to have the rules and policy that are going to allow that competition to be fair.”
“The level of vertical integration in this country is quite unprecedented,” added Hennessy. “And we support that level of vertical integration because we accept the argument (that it’s necessary for competition).” But he added that both the CRTC and the Competition Bureau have expressed concerns about vertical integration in the media industry, so it’s an area that will continue to cause concern.
A second key topic for discussion was the upcoming 700MHz spectrum auction, expected to occur in 2012. With no auction rules set out yet by Industry Canada (but anticipated this fall), every company at the Summit (not just on this panel) has been lobbying for its own rules.
Earlier in the day, Videotron president and CEO Robert Dépatie had advocated for an in-band spectrum cap that would allow regional incumbents who already have 800MHz spectrum to bid on only one block of 700MHz spectrum in those regions. New entrants who do not already own low-frequency spectrum in certain regions would be allowed to buy up to two blocks of 700MHz spectrum, under Videotron’s proposed plan.
One wireless provider which clearly benefited from the spectrum set-aside rules established for 2008’s Advanced Wireless Spectrum auction was Globalive Communications, which owns the Wind Mobile wireless brand.
Ed Antecol, Globalive’s vice-president of regulatory affairs and carrier services, said the Canadian wireless market is dominated by “a cosy little oligopoly” of three telecom giants – Telus, Rogers and Bell and his company still needs help with the next auction. “If (the AWS auction) had been a completely open auction, I would have thought the newcomers wouldn’t have stood a chance to gain enough spectrum to offer national services. They would have been steamrolled right over,” Antecol said.
He also added (to the agreement of most) the federal government needs to rethink foreign investment rules so as to expand the capital base as we head into the 2012 auction. “The wireless business is extremely capital intensive, and start-ups need access to lots and lots of capital on reasonable terms.”
John Lawford, counsel for PIAC, added that if the government wants to continue to foster competition in the wireless industry then it must include set asides again in the upcoming spectrum auction.
However, Telus’ Hennessy said a distinction needs to be made between spectrum caps and set asides, suggesting that the government’s focus on set asides last time resulted in $2 billion in overpayments for spectrum.
“Caps are a much better way to make sure you have more than three players,” Hennessy said.
Something’s funny… From left are Cartt.ca’s Greg O’Brien, Globalive’s Ed Antecol, Bell’s Mirko Bibic, Rogers’ Ken Engelhart, PIAC’s John Lawford, MTS Allstream’s Chris Peirce and Telus’ Michael Hennessy.
Photo by Michal Tomaszewski, courtesy the Canadian Telecom Summit.
