Telecom competition depends on regulation: Prof

Canada is behind several European countries in broadband penetration and countries ranked higher tend to have competition among carriers who own networks rather than resell incumbent carriers services, a Harvard law professor said at an Ottawa conference on law and technology.

Yochai Benkler, faculty co-director of the Berkman Center for Internet and Society, also said Canada is ahead of the U.S. in broadband penetration.

Benkler made his remarks Friday in a keynote at Taking Stock of Tech: Reflections on Law, Technology and Society, a conference held to launch the Centre for Law,Technology and Society at the University of Ottawa.

“You cannot be both anti-regulation and pro-market,” he said. “You have to choose.”

Benkler’s view – that at least in telecommunications markets, regulation is required to make markets competitive – might surprise some. It wouldn’t be the first time. Benkler’s recent report to the U.S. Federal Communications Commission (FCC) raised some Canadian eyebrows by arguing that this country is not as far ahead in broadband network adoption as many people think.

Commissioned to give the FCC a sense of what other countries are doing about promoting broadband adoption, the report — Next-Generation Connectivity: A Review of Internet Transitions and Policy From Around the World — caused some controversy here. It says that although Canada is widely considered one of the more advanced countries in the Organization for Economic Co-operation and Development (OECD) when it comes to broadband adoption, that idea is based largely on over-all penetration, and other factors such as price and speed tell a different story.

Once second in broadband penetration after South Korea, Canada has fallen behind several European countries and is now seventh – still ahead of the U.S. in 15th place. But when Benkler looked at the speed of broadband connections and the cost, he found both Canada and the U.S. well down in the rankings.

In his keynote address at Taking Stock of Tech, he argued that while many factors affect this, unbundled access to incumbent carriers’ costly infrastructure seems to be a big one. That means not just requiring incumbent carriers to sell capacity on their networks to competitors at wholesale rates, but offering flexible access that might include such things as allowing new entrants to lay their own fibre in the incumbents’ trenches.

Countries with the fastest and cheapest broadband services tend to allow such flexible access, and also tend to have facilities-based competition not just between one incumbent telephone company and one incumbent cable operator per region – as Canada and the U.S. do – but among multiple carriers that own their own physical networks.

On that note, Benkler said after the keynote that the Canadian government’s recent promise in last week’s throne speech to allow foreign ownership of telecom companies may do little to promote competition here. In other countries, he said, foreign carriers have usually entered by buying incumbents, which doesn’t increase the number of players.

 

What might do more good, he said, would be turning regional incumbents into national players – with Telus Corp. providing local service in Bell Canada’s territory, for instance.

Benkler stressed that he wasn’t in Ottawa to encourage Canada to emulate the U.S. – which his report shows doing worse than Canada in most measures of broadband development. He told Network World Canada that no one country is an ideal role model, but Northern European countries such as the Netherlands, Denmark and Norway might be good examples for Canada to look to.

“The point is to look at the combination of things and see what fits specifically,” he said.

The right approach to telecom regulation is hard to pin down, he said, and details need constant adjustment as things change. So the best regulators can do is to find an appropriate level of regulation and be flexible enough to adjust to different situations and changing conditions. The European Union’s new telecom regulation package has done a fairly good job of this, he said.
 

 



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