VMedia blasts ‘regressive’ BTLR recommendation

VMedia Inc. says a recommendation from the Broadcasting and Telecommunications Legislative Review panel’s report that stipulates a primary reliance on “market forces” could stifle competition in Canada’s telecommunications industry, if enacted. Recommendation 28 of the long-awaited BTLR report calls for the Telecommunications Act to be amended to include the objective of fostering “a competitive market for the provision of electronic communications services primarily through market forces and, where required, through efficient and effective regulation.” In its preamble to recommendation 28, the BTLR report states the legislative framework should “emphasize the importance of relying on market forces in the communications sector, and that the broad economic regulatory powers of both the minister and the CRTC should be guided and constrained by this objective.” “To that end, creating an explicit policy objective in this legislation would signal unequivocally to the regulator the importance of relying on market forces to foster a competitive market,” the report states. In a phone interview, VMedia co-founder George Burger said enshrining “market forces” in the Act was a concern, claiming a lack of competition had continually hurt Canadian consumers. Burger said he was concerned the new objective, if enacted, would mean the CRTC would be forced to consider what impact each decision would have on market forces. “When the statute gets changed in this way you’re basically casting in stone the concept that market forces essentially the priority,” Burger said. “And if you do that it really becomes a burden, a stone around the neck of the regulators. They’re constantly going to be examining whether or not market forces have failed or not to justify regulation. He said modifying the policy objective in this way was “not just going back to Maxime Bernier’s 2006 policy direction, but enshrining it”. The 2006 Harper-era directive advised the regulator to base its decisions on market forces to the “maximum extent feasible”. The Liberal Government introduced a new policy directive in June last year, which stressed competition and consumer affordability. VMedia CEO Alexei Tchernobrivets said in an email that undue adherence to market forces had “consigned Canadians to the lowest rungs in internet and mobile services”. “Until there is a robust competitive framework with just and reasonable wholesale access and rates, market forces will continue to exploit Canadian consumers,” Tchernobrivets said. But VMedia’s concerns have been hosed down by a former CRTC commissioner and activist ISP TekSavvy Solutions Inc., who argue the panel has made it clear that market forces alone cannot be relied upon. Teksavvy’s vice-president of regulatory and carrier affairs, Andy Kaplan-Myrth, said in an email that the report’s usage of the term market forces “evokes memories of the 2006 policy direction”, but said it was clear the panel concluded market forces were not sufficient to ensure competition in telecom. “They find disproportionately high profit margins and persistent market concentration among incumbents, and note that the network effects of building telecom networks result in uneven investment and oligopolistic practices,” Kaplan-Myrth said. “So my reading of the phrase ‘market forces’ in the report is that, if you could rely on market forces that would be better, but that has not worked for telecom competition, so efficient and effective regulation is required.” Former CRTC commissioner Timothy Denton, who has been a vocal critic of the report’s recommendations around regulating media outlets, said in an email that the “weight and range” of the recommendations meant concerns that the report was excessively market oriented was “the last thing you need to worry about.” — With reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

VMedia blasts ‘regressive’ BTLR recommendation

News | February 5, 2020

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VMedia blasts ‘regressive’ BTLR recommendation

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