Timothy M. Denton

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Mobile phones, again

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The CBC carries an article today on outrageous charges for data usage imposed by carriers, despite a new code of procedure imposed by the CRTC. There is a way to fix this problem. It is well-known and has produced reasonable outcomes in wired forms of data delivery.

It involves establishing a wholesale price for mobile capacity, and then allowing resellers to supply services in the gap between the wholesale and retail rates charged by the incumbents. This is what a Canadian company called Ting does in the United states with Sprint's facilities. The difference there is that Sprint affords this without being required by the FCC to do so. In Canada we would need to make a decision to do so, and that brings us to the curious reluctance of the CRTC to require wholesale leasing of mobile facilities.

The argument, which has been made from the beginning of cellular telephony, has been that any reduction of the profit margins of mobile operators would crimp their investments in mobile facilities, and therefore that nothing should be done to open their networks to wholesale lessors of capacity.

You may be sure that economists can be found in universities to produce econometric bafflegab to that effect. If you give me a million dollars a year I am sure to have more money for cars and fur coats, too. The question always is the efficiency with which profits are turned into investments in mobile, rather than delivering "value to shareholders". The point of regulation is to drive the value to the customers, the users, us.

My former Chairman said that that "you make ten decisions, eight will be right, one will be wrong, and one you win or lose on appeal", but that if you make a wrong decision, correct it by making another decision. In this case, the near spotless record of the Commission in consumer matters under J-P Blais could use another decision, and you know which way it has to go. It is only a matter of time, I suspect, before the obvious solution will be seen as reasonable and just.

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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 Friday, 28 April 2017
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