At the Canadian Telecom Summit, as always, the Regulatory Blockbuster was entertaining – even if it didn’t solve any substantive issues. On the panel were: Edward Antecol, Vice President Regulatory Affairs and Carrier Services Globalive Communications Corp; Mirko Bibic, Chief, Regulatory Affairs at Bell Canada; Ken Engelhart, Vice President, Regulatory Affairs at Rogers Communications Inc; Michael Hennessy, Senior Vice President Regulatory and Government Affairs, Telus; John Lawford, Counsel at Public Interest Advocacy Centre (PIAC); Chris Pierce, Chief Corporate Officer, MTS Allstream.

John Lawford: “Customers across the entire spectrum need telecom services...and you guys (to Bell and Telus) are the ones taking deferral account money and spending it on HSPA...But you have no reasonable prospect of going broke. It is a strategic move on your part to go to fibre because you’re up against the cablecos...Satellite is not going to save rural broadband; it is one hundred dollars or more...And when foreign ownership takes more of a position you lose some control – it’s already hard enough to get these guys to provide affordable access...When you look at the billions spent on the AWS [Advanced Wireless Services] Spectrum, it would have been better to put that money into rural broadband with open access rules than into general revenue.”

Ken Englehart: “Cable and telecom is basically the same business, but the pipe business is a lot of capital and little content, as opposed to radio and TV which has a lot of content and little capital...There is a big difference between business and residential – in the business market there aren’t two sets of wires into each building...I’m not sure that these small regional networks with a lot of dropped calls are bringing competition in the wireless market....More and more people will cut the cord and take the benefits for portability, and in a huge part of the country wireless broadband is all you can get...We have no problem with opening foreign ownership rules, but if you are going to open them up then open them up.”

Chris Pierce: “This is a network industry, and the network is crucial...In the business market we have a real problem in Canada with lagging productivity...We have to get competition in telecom and ICT to the business community.”

Edward Antecol: “Cable companies don’t have much penetration into business...We have a situation where incumbents have over 90% market share to business...One of the best ways to provide for innovation and service choice is to provide for a viable wholesale access tariff...Rocket sticks are too expensive... Konrad [von Finckenstein, Chair of the CRTC] has proposed moving to 49% [foreign ownership cap], but for a new entrant that will not attract one iota more...Content is a pointless debate, because cable companies will still be subject to the Broadcast Act if they have content.”

Mirko Bibic: “We think it is patently wrong for ILECs to give access to their brand new fibre...For those who seek access the argument goes: the market is so competitive that the cablecos are trouncing the former monopolies, therefore Bell and Telus have no choice but to build networks, then we must have access to stay competitive – the story just doesn’t hang together, because the rules of ownership should apply symmetrically to large and small for complete network convergence...The Broadcast Act will not be opened, and the most practical response is to raise foreign ownership limits – the proposal that the chairman put forward is the most practical, but as long as the Broadcast Act is not opened it will not happen...You can open up the Telecom Act, but what to do with the IPTV business, which is under the Broadcast Act?

Michael Hennessy: “That [Telus using deferral accounts for HSPA rollouts] is completely untrue... If mandatory regulation reduces our revenue, then there is less money to put into rural broadband...A lot of people are indifferent as to whether there is one access point to the internet, or multiple access points...The problem is we are still looking at this through monopoly regulation, but there are no longer monopolies...Nobody who has wholesale access is going to admit that they should pay more than incremental costs...Within 12 months the satellite guys will have up to 25 meg download – 10 for residential, and 25 for business – and five or six megs on the upload...This represents the capacity to meet all customer demand with no digital divide, and without a penny of government money – that is the solution for closing the gap...90% of the population is now covered by rocket USB sticks with decent internet speeds; sure, you can’t run a bunch of TVs over it, but it is another way of providing broadband...If allowing more foreign ownership reduces the regulatory debate, and brings more product into the market, then let’s do it that way, because we are re-debating stuff that was debated 20 years ago, and that is not what is going on in the broadband world...When you hear Mirko [Mirko Bibic, Chief, Regulatory Affairs at Bell Canada] introduce the word ‘symmetry’ into a discussion, that’s when you know you’re in trouble, because things are not now symmetrical , because big companies can invest from cash flow – these are incumbent returns...Bell is saying, “Build your own damn network, and get all the money from Canada,” but it is untenable in Canada to think that we will have the risk capital available to fund that kind of broadband or network expansion, because Canadian money is value money – it is looking for safer rather than riskier returns...On this one Canadians are way ahead of their government, with culture being the biggest red herring in this debate...It is very simple: you have to sell one thing [i.e. content or carrier/ISP holdings], you can’t own both, otherwise it is not easy for the CRTC to say which company is a cable company, and what it carries or not.”