BURNABY, B.C. — Loosening restrictions on foreign investment and removing regulations that constrain how firms can compete in Canadian telecommunications and broadcasting industries would benefit Canadians through increased service offerings, improved product quality, and lower prices.
That’s the core finding in a just-released study from an independent, non-partisan Canadian public policy think-tank.
“Telecommunications and broadcasting are both vitally important to the economic health of a nation, and yet in Canada, both suffer from inefficient competition, which means Canadians suffer through more limited service offerings and high prices,” said Steven Globerman, a Fraser Institute senior fellow and author of Promoting Efficient Competition in Canadian Telecommunications and Broadcasting.
The study finds that opening up telecommunications and broadcasting in Canada to increased and less regulated competition, including from foreign investors (except in cases where national security might be compromised), would promote more consumer-focused content, more choice and lower costs for Canadians over time. Specifically, in telecommunications, competition has been tightly managed by successive governments and focused on establishing a fourth national carrier to compete with the major incumbents: Bell Canada, Rogers, and Telus. “Consequently, investment and innovation has been discouraged and prices have been higher than they otherwise would be. However, given the emergence of a fourth national carrier, the justification for regulated competition no longer holds,” the Fraser Institute concludes.
It adds that Canadian public policy in broadcasting has primarily focused on subsidizing the production and distribution of native-to-Canada content. Incumbent broadcasters are the conduit, directly or indirectly, for the relevant subsidies, which, in turn, are largely passed through to consumers. This means Canadians pay a higher price for streaming services and other broadcasting services, Fraser says.
For Globerman, “Public policy in both the telecommunications and broadcasting sectors has been directed at objectives other than promoting efficient competition, and the result has been less innovation, more limited choice of products and services and higher prices for Canadians.”
— With editing by RBR+TVBR in Vaughn, Ont.
