Montreal, February 21, 2004  /  No 138  
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Harry Valentine is a free-marketeer living in Eastern Ontario. He can be reached at
(Part Two)
by Harry Valentine
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          In a telecommunications environment free from economic regulation, local electric power companies would be able to offer new data transmission and/or telecommunications services to a variety of clients. Most local power companies now use telecommunications-grade fiber-optic lines to control the operation of transformers at various substations. Each fiber-optic strand can transmit up to 2-million simultaneous messages; however, each power company that owns an optical fiber line typically uses about one-tenth of one percent (0.001%) of its data transmission capacity. These local fiber-optic lines could be connected to the fiber-optic lines that increase the tensile strength of some of the new high voltage long-distance electric transmission lines.
          These telecommunications-grade fiber-optic centre cables are able to transmit information signals over long distances. Several power companies are beginning to rebuild sections of the power grid, including installing new towers and replacing older cables with newer fiberglass reinforced cables. The connection between local and long-distance power company fibers creates new long-distance telecommunications networks between cities. Power companies may either enter the telecommunications business themselves, or choose to lease their unused data transmission capacity to smaller telephone and telecommunications companies, even to cable TV companies which could access a wider range of TV stations.  
          Smaller, independent telephone companies could negotiate with local power companies so as to apply modified multiplexing technology to existing local power lines, adapting them to carry telephone and internet signals. The larger monopoly telephone and telecommunications monopolies would face increased competition that could impose a level of market discipline on them that would go beyond the typical mandates of the state regulators. State regulators would not be needed to compel the monopoly telephone companies to open their networks to smaller, competing telecommunications companies. Competition may encourage the telephone monopolies to offer smaller telecommunications companies this same kind of access to their networks. 
          The potential of unfettered competition achieving the kind of objectives once intended by state regulation, would likely prompt the "captured" state regulators into self-preserving action to save their credibility by initiating regulatory control over the fiber-optic lines and local networks of power companies, thus simultaneously protecting the commercial interests of established telecommunications monopolies. Such action would discourage or delay the transmission of revenue data signals on power company fiber-optic and local power distribution networks, even before these systems carry their first long-distance commercial telecommunications signals. Ultimately, the market tribunals that oversee telecommunications and the electric power sectors will have to be disbanded and dismantled along with their regulatory frameworks. This would then allow unrestricted market competition to fulfill its role as a market driven regulator.  
     “The market tribunals that oversee telecommunications and the electric power sectors will have to be disbanded and dismantled along with their regulatory frameworks. This would then allow unrestricted market competition to fulfill its role as a market driven regulator.”
          Canada's federal government would likely refuse to disband the CRTC. The provincial governments would do likewise with their electric power regulatory tribunals. Both levels of government would prefer to protect such tribunals to which they appoint political allies as a reward. The belief is that there is some merit in these allies being "captured" by politically favoured regulated industries, then using economic regulation to protect their commercial interests.  
          A very large body of academic research material proves that in the long term, market economic regulation ultimately fails by achieving the opposite, or something other than what was originally intended in the short term. Telecommunications economic regulation serves mainly to restrict competition, maintain higher telecommunications prices, protect existing providers and prevent the emergence of new types of competitive telecommunications services.  
          One of the earlier political objectives of telecommunications and broadcasting regulation was to protect and preserve the French language in Quebec. That same objective can also be realised in an unregulated economic environment. New emerging telecommunications technologies now makes an expanding range of online (learner-paced) educational opportunities, together with an increasing variety of educational and entertainment television programming, available in the French language from several French-speaking European countries.  
          New telecommunications-based educational, entertainment, business and employment opportunities are continually being developed internationally, including among people from an international variety of French-speaking nations, thus sustaining and preserving the use of the French language internationally as well as indirectly protecting the future of the French culture in regions like Quebec. 
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