The CRTC's decision on usage-based billing is not only sound as a matter
of public policy, it also respects the spirit and letter of the policy
direction. Contrary to what Mr. Clement and other critics are saying,
the regulator is not imposing a business model on the industry. It
decided to stop imposing one that was unrealistic, biased in favour of
resellers and interfered excessively with market forces.
In pressuring the CRTC to rescind its ruling, the government is
disregarding the principles it asked the CRTC to rely upon when it
issued the policy direction in 2006 and seems guided only by the need to
address the public outcry that followed the decision.
This is not to say the federal government should never overturn the CRTC
on policy questions. The Telecommunications Act provision
allowing the federal government to vary, rescind or refer back a
decision to the CRTC for reconsideration has proven useful in the past.
Mr. Bernier used this power twice to accelerate the deregulation of VoIP
services and local telephony. In those instances, however, it was clear
the CRTC had strayed from the principles that were enshrined in the
His successor should actually have used it last fall to overturn another
CRTC ruling, which will force the telcos to give alternative ISPs access
to their network at the same speeds as the services they offer to their
own retail customers. This means every time the network owners invest
billions of dollars to increase the speed and efficacy of their
services, resellers get to benefit from it, even though they have not
invested one cent to develop those services.
In its ruling, the CRTC does recognize that as technologies and markets
evolve, mandated access will eventually be phased out when there is "sufficient"
competition. But the ruling ensures that smaller players will never need
to make the investments necessary to build their own infrastructure and
provide that competition, since their access to all future improvements
in the network has been guaranteed.
Mr. Clement chose not to contest that ruling. And now, he wants
alternative ISPs to be able not only to resell next-generation broadband
services, but to resell unlimited amounts at a regulated fixed price
that has nothing to do with market conditions. A much more efficient way
to increase competition would be to change the law to allow foreign
competition in the sector, without bungling the process as he did with
In sum, the government should only interfere―but then always interfere―when the regulator strays away from the principles enunciated in the
policy direction or in the Telecommunications Act. With his
erratic decisions, Mr. Clement has made a mess of what should have
become a clear and consistent telecommunications policy since 2006,
grounded on freer markets and lighter regulation.