Timothy M. Denton

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Terry 'Bellhead' Corcoran is only coherent if big telco is the answer

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Terence Corcoran fights against bad policy night and day at the National Post. At least he tries. But on telecom policy I have been forced to conclude he only has one policy. Giantism is good, and competition be damned if it gets in the way of giantism. If that is not so, then he is radically incoherent.

In an editorial  entitled "Good riddance to fourth carriers", Terence Corcoran continues his long-standing fight with the former government's telecom policy, which had sought to reserve spectrum blocks for new entrants, so as to enable at least four carriers in most parts of Canada.

It should be a matter of indifference to a pro-competitive person if there are three, four, or more mobile carriers. What should be of concern is the consumer benefit of low prices. Mr. Corcoran cites Gerry Wall's report to the effect that prices were lower in Manitoba than other provinces (an observed fact). However, Mr. Wall was of the view that the lower prices that Manitoba Tel was charging diminished its capacity to build out networks. It was not making enough money, and became vulnerable to Bell Canada's proposed buy out at $40 a share.

In passing Mr.Corcoran takes a shot or two at Professor Michael Geist, who favours more carriers than three. Geist had concluded his view of the proposed buy out by Bell as follows:

The deal therefore represents a huge blow to the government’s hopes for a more competitive wireless marketplace. Instead, one of Canada’s lower cost provinces is likely to see increased prices and the market continues to consolidate around the big three providers. If wireless competition is a priority, the government and regulator should carefully examine the proposed transaction and consider whether it moves Canadian wireless in the wrong direction.

Since the number of people who write about telecom policy is tiny, and one of them holds the editorial control of the Financial Post, it is unfortunate that he seems to be so completely fanatic a Bell-head.

What are the attributes of Bell-headism?

  • The Internet has nothing to tell us about how competition could or should be organized in computer communications.
  • Carriers should be vertically integrated from the transport layer up the protocol stack through to the applications layer.
  • Accordingly, only those companies with scale sufficient to build massive capital-intensive networks can and should compete.
  • Attempts to do any of the following are therefore anathema:
    • reserving spectrum for new entrants
    • breaking up the carrier into capital intensive transmission section obliged to lease capacity on equal terms to all who need capacity  (breaking up vertical integration)
    • establishing wholesale prices for leased access for various smaller competitors to "resell", that is, sublease capacity
  • Legal privileges for carriers (to cross roads,cut trees, dig up streets) held for over a century, and therefore tobuild up the cumulative advantages, are of no consequence in a Bell-head's analysis of the situation.
  • And if competition leads to lower consumer prices, that is a Bad Thing, because it gets in the way of being a giant, but buying out the effective competitor and raising prices, that is a Good Thing, because it leads to a divinely approved level of giantism in telecoms.

I am unable to fathom Mr.Corcoran's ideas of telecom policy (which is computer communications policy) as other than being enslaved to whatever serves Bell Canada's interests, and to a wholly obsolete idea of what competition means in an Internet era. If that is ad hominem, I regret it, but I am at loss to make any coherent sense of his ideas in different terms. Perhaps someone can help me to a better understanding. On other issues he is a champion of good sense, but on computer-communications, he is invincibly ignorant.

 

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Timothy Denton is a lawyer by training who practices principally in telecommunications and Internet policy and domain name issues, with a strong concentration on explaining what the technology is and what it means.

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Guest Sunday, 25 August 2019
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