Politics

by Blaise Alleyne


Filed Under:
canada, corruption, lobbying, politics, telcos

Companies:
bell, telus



Canadian Telcos Appoint Ex-Cabinet Ministers To Their Boards

from the not-as-bad-as-it-seems dept

Two of Canada's big three telcos have recently appointed former cabinet ministers of the ruling party's government to their respective boards. A few weeks ago, Bell appointed Jim Prentice, who was responsible for telecom policy and regulating companies like Bell while serving as Minister of Industry in 2007-2008. Then, while former cabinet minister Stockwell Day's new "government relations" not-a-lobbying-firm has raised concerns about loopholes in lobbying laws, this past weekend Telus named Day to its board. (How long until Rogers aligns with industry standards and finds an ex-minister of their own?) OpenMedia.ca decried both appointments as examples of big telecom "cozying up to the government," but journalist Peter Nowak argues it's the system's fault: "Lobbying is so pervasive and deeply integrated" into the system that the only way to deal with it seems to be to "fight fire with fire," as even new wireless carriers have quickly learned -- i.e. don't hate the players, hate the game.

Neither Prentice nor Day will be lobbyists, but it seems obvious that their knowledge of government is being sought for the purposes of lobbying. In the broadband space, Bell has been butting heads with the government and regulators over issues like wholesale usage-based billing. In the wireless space, the next spectrum auction is approaching and incumbents want to avoid a repeat of the last auction, where 40% of the spectrum was reserved for new entrants and the government forced incumbents to offer roaming agreements -- rules ironically set by Bell's new board member, Jim Prentice.

Are these appointments examples of regulatory capture? It might appear that way. It's certainly a case of telcos gearing up for a heavy round of lobbying that's unlikely to favor consumers, but it's hardly a case of blatant revolving doors. Day was not actually responsible for telecom policy, and Prentice was behind rules that angered incumbents. If the government favors incumbents in the next spectrum auction or backs down on wholesale usage-based billing, that would be a different story, but Canadian incumbents are scrambling because they've lost some big battles. This isn't so much a cause for deep concern as it is a challenge to those who favor more competition in Canada to keep pressing the government to follow through on what it's started.

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  1. icon
    Blaise Alleyne (profile), 10 Aug 2011 @ 8:06am

    Re: Are we sure about the facts here?

    Originally the CRTC approved usage-based billing (which the telcos lobbied hard for to squeeze out the little guys) and the gonvernment did nothing. Ol' Jim only stepped in much later because there was a huge public backlash *and* an election was going on at the same time. And even then all the government did was tell the CRTC to reverse its decision or the government was going to make them do it.
    That actually wasn't Jim Prentice. He was shuffled to Ministry of the Environment after the 2008 election, and he resigned from office at the end of 2010, did not run for re-election in 2011. It was Tony Clement who was Minster of Industry around usage-based billing.

    I don't think the government had a comprehensive position there either, but they put their foot down in the end. Even if it was reactionary, they responded to the uproar on behalf of consumers rather than letting things go ahead Bell's way. Not visionary, but not in the industry's pocket.

    "Not terribly different than what you mentioned but IMHO it does give much less credibility to Jim being anti-telco while in office."
    I was referring more to the wireless spectrum auction while Prentice was Industry Minister. I'm not sure whether those rules were drafted while he was in office, could have easily been something he inherited from a predecessor, but he was Industry Minister while they were actually implemented. That is, in the face of lobbying from Robellus, he still set the rules to reserve 40% of the spectrum for new entrants and force the incumbents to offer roaming to them. It was that auction that allowed WIND, Mobilicity, Public and Videotron(?) to get spectrum and launch a few years later.

    It's not anti-telco at all, but he at the very least didn't cave into pressure from the incumbents to keep new entrants out of the market.

    (Copyright, on the other hand...)

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