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Fraser Institute: Nix Foreign Ownership Rules to Increase Wireless Competition

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Screen Shot 2013 08 26 at 9 05 25 AM

Vancouver-based think tank, the Fraser Institute, has released a study today declaring Ottawa’s current wireless rules of ‘handicapping’ Canadian telecom companies won’t increase competition, but could possibly make matters worse for consumers:

“The goal of achieving and maintaining a competitive market is not the same as having a minimum number of competing firms,” said Steven Globerman, Fraser Institute senior fellow and Kaiser Professor of International Business at Western Washington University.

“By setting up rules that handicap the three large Canadian telecoms and favour small or new players in the marketplace, the federal government is effectively subsidizing new entrants and promoting inefficient competition. This could make most consumers worse off, rather than better off.”

Steven Globerman, known as an “expert on trade and investment and a former consultant to Industry Canada and the CRTC” says the existing wireless marketplace is indeed competitive. A better solution he suggests would be for Ottawa to remove foreign ownership restrictions on Canadian telecoms and allow outside investors to enter the country through mergers and acquisitions. This would increase competition as existing companies would be incentivized to improve service and pricing:

“Relaxing foreign ownership limitations would allow for new entrants to better compete with Canada’s big three telecoms,”

“Just the threat of a takeover gives companies a greater incentive to provide customers with better pricing and service.”

The Competition Act would be better suited for dealing with anti-competitive behaviour by incumbents, rather than have government intervene and establish rules. The Fraser Institute has been described as a think tank with conservative and libertarian views.

What do you think? Would lifting foreign ownership rules make incumbents more inclined to provide better service and pricing?

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  • websnap

    Ok, so I still disagree with everything coming out of the Frasier Institute… good, all is right with the world…

  • robellus … we hate you

    i read these news and cant believe the lengths robellus will go to stop this from happening….
    this alone makes me want another player on this field.

  • Chrome262

    This was the initial thought with the CRTC slight relaxation. The rumor was that they would remove them completely. It wouldn’t of been a quick fix though, so maybe thats what they were hoping for. Not sure.

  • rrosales

    Mr. Globerman used the word ‘subsidizing’. The Big 3 enjoyed and took advantage of this during the previous governments.

    ‘Relaxing foreign ownership’??? Didn’t the Big 3 fight previous and current governments over this? They haven’t laid down their weapons, have they?

    ‘The Fraser Institute has been described as a think tank with conservative and libertarian views.’ I guess its view changes depending on who’s paying them to lobby.

  • 1His_Nibs1

    Funny, I posted a link to this story from MSN.ca in the Stockwell Day piece. It never got posted and now Gary posts it an hour or two later. Hey Gary, how about giving credit where credit is due?

  • 1His_Nibs1

    Funny, I posted a link to this story from MSN. ca on the Stockwell Day post but it didn’t get posted. Then it gets posted by Gary here shortly afterwards. Sorry if I “scooped” you Gary but how about at least give credit where credit is due?

  • We got this story from our own sources, thanks for the tip though! We always give credit where it is due, check all of our posts and tips from readers and loyal commenters.

    Our disqus comments aren’t checked in real time BTW, best bet is to email us tips@iphoneincanada.ca if you have something awesome to share 🙂

  • 1His_Nibs1

    I’ll keep that in mind for future reference.

  • We linked directly back to the Fraser Institute press release and the report itself, primary sources of this article, unlike most newspaper publications who can’t be bothered.

  • SV650

    Gary, if you are going to moderate Disqus comments which have links in them, it is appropriate to provide a reasonable (published) moderation time lag. Leaving such comments languishing in the moderation queue for any substantial period shows poorly to your community. There are a number of means to address this issue, and I hope you are able to reduce the time to approved queued comments.

  • ward09

    The Fraiser Institute had Telus’ CEO and President as their guest of honour and award recipient a couple of years back at their annual fundraising dinner.

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