Tuesday, June 21, 2005

Is the FCC (and CRTC) Relevant Anymore?

Mark Evans


As the Internet lets services be delivered from anywhere, a contentious issue is whether telecom regulators are still relevant and, if so, what should their roles be. In the U.S., the Progress & Freedom Foundation, a think tank/study group created to draft telecom reform legislation, recently issued a working group paper suggesting the FCC operate in similar to the Federal Trade Commission. The foundation believes regulation in the digital world should be based on competition law principles using anti-trust law and economics - in other words, let competition rule as long as it's fair and there is no "dumping" of services. In Canada, there are growing calls for the CRTC to adopt this approach rather than trying to micro-manage the market. This sentiment gained momentum after the CRTC licensed three satellite-radio operators last week. These licenses include stipulations that 5% of sales be used to develop Canadian artists, and there be at least eight channels of Canadian content. In a recent column in the National Post, Paul Kedrosky contends there was no need for the CRTC to get involved in the satellite-radio market because XM and Sirus in the U.S. are already playing plenty of Canadian music. He argues the CRTC simply positioned itself as a middleman to collect fees and redistribute fees - a role, he believes, it has no right to play. The CRTC also got itself into hot water last month with a VOIP decision that regulates incumbent carriers while allowing cablecos the freedom to price however they want, including selling VOIP as a loss-leader. Don't be surprised if the three-person telecom policy review panel takes a good look at the CRTC's mandate. It's quite another thing, however, if the wobbling Liberal government has the appetite to implement any dramatic changes.

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