Macdonald-Laurier Institute: CRTC Should Not Regulate Prices and Competition

crtc

The Canadian telecommunications market is dominated by the three big carriers. The carriers’ prices are way too high, speeds are too slow, and a large portion of the country is still left with low or no connectivity.

A recent survey by polling firm EKOS showed that the majority of Canadians in rural areas have few options and poor connection speeds. The people who were polled believe that the government should step in to fix the problem.

The Macdonald-Laurier Institute believes that the solution is to stop the Canadian Radio-television and Telecommunications Commission (CRTC) from regulating prices and competition.

The report also slams the CRTC’s “skinny plans” that must cost no more than $25 per month in order to appeal to low-income Canadians.

“Regulation has begot regulation all in the name of so-called consumer choice.”

The report notes that there have been issues that the CRTC hasn’t been able to solve. Firstly, the cost for a telecom to provide high-speed fibre internet is ridiculously expensive, making it really difficult for anyone outside the big three to afford.

Finally, the CRTC has not been able to solve internet access in northern Canada. Currently, access is limited and extremely expensive, with most places only being able to access the internet over satellite.

“Is the solution to take away the CRTC’s ability to dictate access standards and leave it up to the market to solve this problem? As many experts have noted, the entire issue is that there’s not enough market demand in sparsely-populated rural and Northern communities for even Canada’s largest companies to invest there. The CRTC operates a fund to subsidize infrastructure expansion, which the largest telecoms in the country pay into. This year they actually pushed back against a CRTC initiative that would ask them to pay into the fund through their internet revenues in addition to cable.”

Do you think the government should take away the CRTC’s ability to dictate standards and regulations? Let us know in the comments below.

[via Motherboard]

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  • mcfilmmakers

    If the CRTC stopped regulating prices, prices would skyrocket.

    What the CRTC should do is nationalize the wholesale access to the connections and force all companies to give a percentage of profits into the wholesale fund which would be used to expand the network aka the Australian plan.

    The CRTC should also be regulating MAXIMUM prices rather than minimums and certainly should force minimum speeds (no excuse for anything less than 25mbs to exist in 2016.

    Also, it’s time that we start paying 1$ per mbs. It is ludicrous to charge 60$ and up for a 25mbs connection.

  • erth

    the crtc should be scrapped and the market should be opened. we need to allow the market to force prices either up or down. markets work, period. they will find a price level that will work for customers and businesses, but the market has to be open. no longer will the government artificially create a environment to do business in canada.

    scrap the crtc now. and open the market.

  • Peter

    CRTC should stay and should regulate the market even more. CRTC should be also more active investigating strange “competition” among carriers where there is really no choice for the consumer. Prices are identical.

  • BigCat

    The economics of what you are suggesting cannot be disputed. However, as you know Canada is very big place with a relatively small and spread out population. The consequences would mean places like Toronto and Vancouver would see rates drop while small towns in the North would either lose their service or simply not be able to afford it. Not unlike healthcare were the rich would live longer and the poor would basically die waiting.

    Having said that, I agree there is lots of room for improvement. I strongly suspect that the CRTC is hobbled by special interest legislation. Our only hope for reform will be if Canadians make this an election issue, which I know sounds incredibly bad.

  • Michel Plante

    McDonald-Laurier should sfu… The CRTC should open for more competition and dictate the ROBELUS to lower their damn High Prices.????????????

  • Brenda

    A free market without CRTC regulation is not going to make the problem go away. It most likely will make it worse. We have to face the fact that our small population and large land mass present unique problems.

    All attempts to make the market more competitive – by encouraging more carriers and forcing cable providers to offer “skinny” packages – have failed. The population isn’t large enough for more than the big three to survive. And there’s no point in getting a basic cable package when there’s much better content available for free online.

    We need to fix the CRTC, making it more responsive to rapidly changing technology. I’d like to see many of their regulations replaced by fees (i.e., taxes) on companies and the money used to support improvements to rural access and grants to Canadian content providers.

    And before some of you start complaining that these fees will be passed on to customers and that we are already taxed enough, have a look at the programming in countries with licensing fees (yes, their wireless and Internet bills are lower because they’re geographically smaller). The quality of their programs is amazing and many channels are commercial free. You really do get what you pay for.