Montreal think tank MEI argues for shutdown of Canadian telecom regulator

MEI also states Canadians pay for the wireless service equivalent of a Lexus

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Montreal-based non-profit research group MEI is arguing that the time has come for Canada to do away with its telecom regulator.

In a May 8th, 2018 report, MEI argued that since Canada has successfully transitioned from monopoly to competition, Canada no longer needs the Canadian Radio-television and Telecommunications Commission (CRTC).

In fact, abolishment of the the CRTC in its current state is overdue, suggested MEI, pointing to a 2006 report from the Telecommunications Policy Review Panel that stated “detailed, prescriptive regulation is no longer needed.”

In particular, MEI took issue with the Wireless Code‘s two-year contract provision stating that it reduced consumer choice.

The think tank also wrote that network-sharing policies fail to create facilities-based competition — referring to competition between carriers that invest in physical network infrastructure rather than purchasing wholesale service from another carrier.

Instead, MEI suggested that Canada look to the Danish model — something previously advocated by former Trump advisor Roslyn Layton, who was vocal about her disdain for the CRTC’s April 2017 zero-rating decision.

Lexus versus Yaris

In addition to this recommendation, MEI asserted that Canadians already have access to competitive, quality telecommunications services. Though MEI acknowledged Canadian wireless services are more costly than in many other countries, the think tank said the quality makes comparison ill-advised.

“It’s like comparing what two people have to pay to lease a car, without noting that the first is a highly-paid executive leasing a Lexus she uses every day, while the second is a low-income retiree leasing a Yaris that he uses once a week,” said Martin Masse, senior writer and editor at MEI, in a press statement.

MEI based its insights off of several different research sources, including data from OECD, GSMA Intelligence and the Nordicity report commissioned by the federal government, which stated that Canadians pay among the highest prices in the world for wireless service.

However, MEI was displeased that Nordicity’s report offered no context as to the investment made by Canada’s carriers. MEI cited GSMA Intelligence as reporting that wireless carriers in Canada invested on average $78 USD (roughly $101 CAD) per connection between 2010 and 2016, almost twice as much as their European counterparts, which invested $40 USD.

Further, MEI reported that Nordicity’s data, when adjusted for inflation, shows a decline in pricing for wireless services between 2008 and 2017.

Telecom industry group CWTA commented in a statement to MobileSyrup: “We appreciate the authors’ economic perspective on pricing. We agree it’s necessary to frame international price comparisons in a broader conversation about the overall value to consumers in order to get the full picture.”

The full report is available here.

Update 5/8/2018: Updated with comment from CWTA.