Ottawa city council shows innovation ignorance

When are open markets not really open? What politician ever saw an issue he or she felt unworthy to comment on?

These two questions were the underlying themes last week when a motion was brought to Ottawa city council to support the CRTC in its bid to force big telecoms to open up their fibre optic networks to competition.

The motion, which failed 17–7, shows either a disappointing lack of comprehension on the part of city council or an acknowledgement that keeping corporate interests happy is more important that protecting constituents.

On the surface, it seems unfair to force Bell and Rogers to allow competitors, essentially wholesalers, access to infrastructure that cost them billions to build. Fibre optics are not cheap, and the logistics of building out a network across Canada are complex. In an open market, these competitors could be justifiably told to build their own networks. However, despite what you may have been told about who won the Cold War, Canada is not an open market.

Bell and Rogers, and to a lesser extent Shaw and Vidéotron, have had near monopolistic access to a government-protected market for telecom in Canada for decades. Their turf is protected from foreign investment, their coffers filled with government money in the form of subsidies, and their market share maintained through a regulatory environment that makes it near impossible for new entrants to gain any traction.

Open access to these networks has been a core principle of telecom policy in Canada for decades specifically for this reason. In exchange for protecting the telecom oligopoly, the CRTC merely asks that these corporations sell access to their networks, at fair market prices, to smaller providers.

This becomes even more important in light of the transformation taking place in telecom. Where there was once cable, satellite, cellular, broadcast and the good ol’ telephone, there will soon be only one thing – data. Whether you’re watching Netflix, texting, playing Candy Crush or listening to the Sens game, it’s increasingly all just ones and zeros transmitted over the same pipe. That pipe, the one that Bell and Rogers are fighting so hard to protect, is the future of all information in Canada.

So why is this important? Well, if we allow a handful of companies to control this infrastructure, with near identical pricing and services, we are stifling choice and innovation in Canada.

If Bell and Rogers don’t want to allow access to their networks, the market should be opened to foreign competition. The deal we as Canadian make with the telecoms is that they get protection from competition in exchange for greater regulation. Now they want it both ways.

This became an issue at city hall because Mayor Jim Watson (speaking as an individual who just happens to be mayor) issued a statement to the CRTC in support of the Bell/Rogers appeal. His argument, and indeed that of Bell and Rogers, is that providing this access will discourage them from making investments in the future. This argument is of course absolute nonsense, since it clearly did not stop them from making the current fibre optic investments, despite being under the same open access requirements on their legacy networks for decades.

The city councils of both Toronto and Calgary have already voted on similar motions supporting the CRTC and open access, ostensibly a vote in support of their constituents who overwhelmingly benefit from the policy.

Ottawa went in a different direction defeating the motion and supporting the telecom oligopoly. Councillors claimed the motion was pointless as the decision is not theirs to make. They questioned the value of a mostly symbolic vote on a matter over which they have no influence. Putting aside that both Calgary and Toronto councils clearly saw value in supporting their constituents – the people, not the big telecoms – symbolic votes have never been a problem for them before.

In fact, just last year, city council passed a motion asking the federal government to move the victims of communism memorial, an issue over which they had no direct control. Clearly, a memorial on a small parcel of central land is important to Ottawa, but so is the digital infrastructure that will form the backbone of the economy for the next 50 years.

Without fair and open access to these networks, innovation will suffer. Startups, researchers, and consumers will suffer due to higher costs to access the infrastructure that drives out economy. These networks are vital to a healthy economy.

For city council to take a pass at standing up for access to the infrastructure of the future on a point of jurisdiction is a cop out. Clearly, other large Canadian city councils saw value in speaking out against corporate interests that have the potential to stifle innovation.

It was particularly disappointing hearing councillors repeating Bell/Rogers talking points verbatim instead of doing what is best for growth and open access in Ottawa. Remember that next time one of them makes yet another speech on innovation.

The explosive growth of the digital economy was only possible because of the open access policies of the past. By supporting the end of that framework, city council is stifling innovation and crippling the future of Ottawa’s economy.

Spencer Callaghan is an Ottawa writer.

1-patreon-image

One thought on “Ottawa city council shows innovation ignorance

  1. Good piece Spencer.

    “Councillors claimed the motion was pointless as the decision is not theirs to make. They questioned the value of a mostly symbolic vote on a matter over which they have no influence. ”

    Another fact that suggests this wasn’t a trivial matter or out-of-scope for Ottawa’s council is the fact that Bell felt it was important enough to do some lobbying on the issue at City Hall:
    http://ottwatch.ca/lobbying/files/1500
    http://ottwatch.ca/lobbying/files/1499

Leave a Comment