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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    Anonymous Coward, Aug 9th, 2011 @ 10:21pm

    f-that

    i.e. don't hate the players, hate the game.

    Thats a copout, it means the same thing as I am morally corrupt and dont care

     

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      Blaise Alleyne (profile), Aug 9th, 2011 @ 11:08pm

      Re: f-that

      It definitely can be a cop out. But two examples of where it's relevant:

      1. As I understand it, Stockwell Day isn't technically doing anything illegal. He's not a lobbyist. But, he's advising lobbyists on their government relations strategies. The rules against lobbying are pretty weak if you can avoid falling afoul of the law by just removing yourself one-level from the lobbying.

      But, I mean, Day's website says this:
      "Stockwell Day Connex is not a lobbying firm. Further, in consultation with Canada’s Office of the Conflict of Interest and Ethics Commissioner, and subject to the Government of Canada Accountability Act and the Conflict of Interest Act, neither Stockwell Day nor Stockwell Day Connex will provide ‘insider’ information on any matters related to Cabinet discussions, files or decisions, past or pending."
      To the extent that's actually true, if the Office of the Conflict of Interest and Ethics Commissioner says things are okay? The system is set up in such a way that this sort of thing isn't considered a big deal, even though it may well should be.

      2. WIND Mobile had to get into the lobbying game to stay alive in Canada. They've faced legal challenges around Canadian ownership requirements, have had to lobby the government to get auction rules that will let new entrants into the market, etc. So far, IMHO, WIND has used virtually all of its lobbying ability to do things that are good for consumers, but the fact that they have to play the game and drive truckloads of cash up to Parliament Hill? That's a problem with the system.


      But yeah, otherwise, I agree -- even if the system is broken, that wouldn't excuse behaviour that's actually corrupt. That would be a total cop out. But there's a lot of behaviour that isn't corrupt, but isn't really beneficial either, which is tied to more systemic problems.

       

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    Brendan (profile), Aug 9th, 2011 @ 11:47pm

    Should not be allowed.

    We need to have more rules preventing this kind of behaviour. Government officials should not be allowed to take jobs from companies that were within their scope of responsibility. The mere possibility of corruption simply makes it a losing proposition for the citizenry. We stand to gain nothing, yet lose much.

     

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      Jay (profile), Aug 10th, 2011 @ 4:37am

      Re: Should not be allowed.

      No, I don't think rules will help.

      Then you have the Chris Dodd situation appearing more.

      We need *something* against lobbying, but it's quite difficult to figure out what. You would need a way to expose the lobbying process and keep these talks of regulations opened for either peer review or public analysis. Yes, it makes the job twice as hard. But if you needed to poll the country about making your moves, it would make it that much more difficult to impede on people's rights.

       

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        Kevin (profile), Aug 10th, 2011 @ 5:07am

        Re: Re: Should not be allowed.

        I also do not think rules will help. Something that's often forgotten in these debates is that these are just real people acting on (what they generally believe to be) someone's best interests, likely their own. Many politicians claim that lobbyists of various stripes are chosen simply because they are the best candidates for the jobs, since they have the most experience. Similarly, the private sector snatches up ex-government officials precisely because they know how the government works relative to their sector.

        That may be an excuse, or it may not be. But it's perfectly plausible to believe that, at the very worst, this is how a lot of corrupt people (whether they know they are or not) are justifying the revolving door to themselves. If we made rules against this sort of thing, that is, if we made it illegal to appoint lobbyists to government positions they've lobbied and vice versa, we would do exactly nothing to address the underlying phenomenon. You'd still have Washington flooded with people (lobbyists) who are obviously really knowledgeable on certain issues, experts on them (they have to be), right in front of the government at all times. So when they start looking for experts, who are they most likely to think of? The people they see every day, of course. People who have cozied up to them. People they've worked with and have a rapport with. Same with the private sector: Do you actually think regulations like this will decrease the value of ex-government officials?

         

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        Kevin (profile), Aug 10th, 2011 @ 5:10am

        Re: Re: Should not be allowed.

        One more quick thing*:

        I've thought a lot about direct democracy, and I do not think it is possible right now. "[I]f you needed to poll the country about making your moves," that would simply increase the value (exponentially) of political advertising and obviously biased "news" networks like Fox for "controlling the message", to use Cheney's sickening term. People are too undereducated and too unskilled at critical thinking right now to handle direct democracy. The masses, as it were, are too easily controlled.




        *Supposing I'm capable of such a feat

         

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    Sasha Grey, Aug 10th, 2011 @ 2:28am

    Not a good ideas

    My thoughts regarding this issue is that: the major operators in the Canadian telecommunications are broadly categorised as either incumbents or competitors. Incumbents are the telephone companies that provided telecom services on a regional monopoly basis prior to the introduction of competition and include the out-of-territory affiliates of the incumbents. There are a number of categories of competitors, with most competition coming from the cable sector in the form of rapidly expanding cable broadband, VoIP and more recently mobile services.

    Not really good.

     

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    Another AC, Aug 10th, 2011 @ 5:06am

    Are we sure about the facts here?

    "Prentice was behind rules that angered incumbents"

    I am not sure this is true. 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.

    Not terribly different than what you mentioned but IMHO it does give much less credibility to Jim being anti-telco while in office.

    I am on my mobile so I won't dig up links, but cbc.ca had excellent coverage at the time (around april-may 2011 I think).

     

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      Blaise Alleyne (profile), Aug 10th, 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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    Nicedoggy, Aug 10th, 2011 @ 5:38am

    Why are people letting the wolfs inside the den?
    People can bet their socks they will get screwed.

    There is nobody looking after their interests and unless they organize and start being more active politically they will suffer the consequences for letting those other interests be the only ones writing laws and asking for favors.

    The process is simple, write the law and put people who would put those laws there.

     

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